In an interview with Bloomberg at The Year Ahead summit in New York, Citigroup CEO Michael Corbat recently predicted that bitcoin’s threat to the financial system will lead to state-sponsored digital currencies, as governments will have no choice.
According to the CEO, governments won’t take the disruption bitcoin and other cryptocurrencies can cause and are going to answer with their own digital currencies. He notably stated:
“I don’t think governments are going to take lightly other people coming in and potentially disrupting their abilities around data, around tax collection, around money laundering, around know-your-customer.”
Corbat’s perspective comes at a time in which bitcoin’s mainstream adoption continues, and the cryptocurrency’s price surges past $7,200, according to data from CoinMarketCap. Focusing on bitcoin’s ability to bypass various protections financial institutions built, Corbat added that we’re likely going to see governments introduce digital currencies of their own – he noted that “cryptocurrencies” would be a bad moniker for these state-sponsored tokens.
During the interview, Corbat encouraged people to buy cryptocurrencies and to try and use them on their everyday lives, only to find they are still “pretty clunky.” However, just like most Wall Street executives, Corbat argued that the underlying blockchain technology has potential and shouldn’t be dismissed.
Corbat’s bank, Citibank, is experimenting with its own cryptocurrency, dubbed Citicoin, which is meant to reduce friction in foreign exchange transactions throughout the world. According to Bloomberg, it’s also partnered with Nasdaq to use blockchain technology in private share trading.
Other Wall Street executives have been dismissive of bitcoin and cryptocurrencies. These include JP Morgan’s Jamie Dimon, who called bitcoin a “fraud,” billionaire investor Warren Buffet, who warned it was a “real bubble,” and Credit Suisse CEO Tidjane Thiam who said it was the “very definition of a bubble.”
While others have stated they weren’t willing to immediately dismiss the cryptocurrency, and stated that it was “more than just a fad,” Michael Corbat’s reviews are unique as he made it clear they were a threat to the current financial system. Corbat stated:
“You won’t hear us be dismissive in terms of the nascent technology because it’s real and there is something there.”