Former Goldman CEO: Regulators Must be ‘Hyperventilating’ at Bitcoin’s Success; ‘Arming’ to Deal with it
Former Goldman Sachs CEO Lloyd Blankfein’s views about Bitcoin and cryptocurrencies remain unchanged; however, he is “hyperventilating at the success of it.”
“(Bitcoin) could work,” he said on CNBC’s “Squawk Box” Monday only to share the reasons why it won’t.
According to him, Bitcoin’s store of value elements is a “little bit tough” because it is too volatile, “if you lose the code or you lose the slip of paper; it's lost forever.”
As for being a medium of exchange, “here's a problem, you don't know whether or not you're paying the North Koreans or Al Qaeda or the revolutionary guard,” he said.
“At the end of the day, if it ever got big enough to be substantial and a real medium of exchange, how could the regulators, so focused as they are on anti-money laundering and for good reason,” could allow it, added Blankfein.
He points to how following the money is how you can anticipate and maybe prevent certain crimes like 9/11. But with Bitcoin, you cannot monitor who's getting paid in the financial system, which “will undermine the freedom and liberty,” he said. This lack of transparency, Blankfein says, that people like about it, is a conundrum that bitcoin will have to deal itself out.
“If I were a regulator, I would be kind of hyperventilating at the success of it at the moment and I'd be arming myself to deal with it.”
Back in 2018, when Blankfein was the acting CEO of the investment banking giant, he said he doesn’t own any BTC but “If you could 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?”
These comments came after he continued “thinking about bitcoin,” after the WSJ reports that Goldman Sachs is exploding bitcoin trading operations. A couple of weeks back this year, there have been reports that the bank is looking to be a crypto custody player.
Blankfein had also called Bitcoin a “vehicle to perpetrate fraud.”
While he “can’t say why it should work,” he Blankfein “but if it did work,” it would be much like a fiat currency which derives its worth from government diktat. “People are passionate for it and passionate against it,” he had said in 2019.