Goldman Sachs CEO Lloyd Blankfein “It’s ‘Arrogant’ to Think Cryptocurrency Won’t be Successful”

 

Lloyd Blankfein, the CEO of Goldman Sachs, one of the biggest investment banks in the global finance sector valued at $87 billion, has criticized skeptics who believe Bitcoin and cryptocurrency does not have a future, Yahoo News reported.

Since as early as 2017, Blankfein stated that he is not yet convinced the cryptocurrency market has become a major asset class. Despite this, he has frequently emphasized that investors must consider cryptocurrencies like Bitcoin as an emerging asset class and acknowledge the potential of cryptocurrency and blockchain technology.

At the Economic Club of New York conference, Blankfein said:

“If you go through that fiat currency where they say this is worth what it’s worth because I, the government, says it is, why couldn’t you have a consensus currency?”

Previously, during an interview with CNBC’s Kayla Tausche, Blankfein echoed a similar sentiment regarding Bitcoin, describing a period in U.S. history during which the U.S. government abruptly abolished the gold standard and replaced it with a currency with no value, the U.S. dollar.

At the time, US-based businesses, individuals, and investors had a difficulty accepting and embracing the U.S. dollar, a form of paper money, as an alternative to gold, which was prior the standard of money for centuries.

Similar to how paper money was forced to become the progression from gold, Blankfein explained Bitcoin could one day become the progression from fiat money as we shift to using digital money, and thus, although he does not fully understand cryptocurrency and is not convinced that Bitcoin will soon become a reserve currency, Blankfein said he is open-minded about the cryptocurrency market as an emerging asset class.

“A five dollar gold coin was worth five dollars because it had five dollars worth of gold in it. Then they issue paper money that is backed by gold in the treasury. Then one day, they issue paper money that does not have the backing of gold. There was no pledge that if you turn it in, I’ll give you five dollars of gold. It is fiat money. I say this piece of paper is worth five dollars and so therefore it is five dollars and a lot of people did not take that for a long time. But, now they do without question. You move a little bit further and you get bitcoin that is not a fiat currency so I don’t trust, it and I don’t like it. On the other hand, if it works, I say maybe it was a natural progression from hard money to digital money, Blankfein said.

Earlier this week, Goldman Sachs chief operating officer David Solomon confirmed the rumors that Goldman Sachs has been working to establish a cryptocurrency trading desk beyond futures.

“We are clearing some futures around Bitcoin, talking about doing some other activities there, but it’s going very cautiously,” Solomon said during an interview in China. “We’re listening to our clients and trying to help our clients as they’re exploring those things too.”

Goldman Sachs-backed startup, worth nearly $3 billion, Circle, recently announced that through CENTRE (open source framework), the company will issue their own  Fiat Cryptocurrency – Circle USDC (U.S. dollar coin) which will be pegged to the U.S. dollar one-to-one like Tether and will be made available to the general public for everyday buying of goods and services.

Circle plans on introducing its digital dollar on the Ethereum network, the “cryptocurrency” won’t be minable, and will only be able to be purchased on Circle’s platform.

“A price-stable currency, such as a token pegged to the U.S. dollar, is critical for enabling mainstream adoption of blockchain technology for payments, as well as for supporting maturation in financial contracts built on smart contract platforms, such as tokenized securities, loans, and property,” a press release for the new currency notes. “There are several interesting approaches to solving this need, spanning algorithmic reimaginations of money supply to crypto-backed tokens to fiat asset-backed tokens.”

Circle Invest will also give retail investors exposure to a bucket full of seven cryptocurrencies—Bitcoin, Bitcoin Cash, Ethereum, Ethereum Classic, Litecoin, Monera, and Zcash—based on their market capitalization.

According to Fast Company, the new feature which has been dubbed “Buy the market” thanks to Circle’s institutional trading infrastructure, will be cheaper than competitors’ like Coinbase, Square Cash, and Robinhood.

“Right now every coin on Circle is sourced and delivered through Circle Trade,” says Mayer, with an average markup of 1% for each coin. “Buy the market” takes the aggregate of the seven coins’ spreads,” said, Rachel Mayer, a senior product manager who oversees development for Circle.

The app will also allow users to link their bank accounts and make an investment of up to $10,000 in the basket filled of cryptocurrencies, something that ETHOS plans in a more cryptocurrency decentralized model.

It was leaked earlier this month that Sachs plans on allowing its customers a limited number of cryptocurrency derivatives, Fortune reported.

Bitcoin is currently trading at [FIAT: $6,170.41]  down -0.08% at the time of this report according to Coin Market Cap.

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