International bankers are daily confronted with an eight hundred pound gorilla hogging every conversation, bitcoin. Sberbank’s Herman Gref is begrudgingly accepting of cryptocurrencies in a region openly hostile; Deutsche Bank is dismissive, UBS is cautious, Swiss National Bank is worried, and the European Central Bank views bitcoin as not impactful. Whatever their statements, they’re no longer claiming ignorance.
Bankers’ Heavy Sigh
“Virtual currencies,” Russian banker Herman Gref of Sberbank began, “are a natural outcome of blockchain technology. We may ban them, we may welcome them. It is trendy to urge people not to play with them. But they are a fact of our life.”
Russia as a financial governing region has been unusually hostile to cryptocurrencies, going so far as to propose projects of state-backed cryptos as a strike to tame enthusiasm.
Mr. Gref continued, “Protectionism is just the first reaction of the state. However, both the institution of private money and the states, which will dare to change the way currency is issued, will eventually find a place for cryptocurrencies in the economy,” he said, marking an exceptionally philosophical outlook for some in his position from any region.
Sberbank is state-owned, and is the largest bank in Russia, third biggest in Europe though based in Moscow.
Russia Today characterized Mr. Gref’s remarks as advising “not to ban it. The banker added that blockchain is a gigantic opportunity for businesses, including small enterprises.”
Deutsche Bank’s Ulrich Stephan was a bit more skeptical, saying, he “would simply not recommend this to the everyday investor.” Bitcoin is too volatile, he warned. Deutsche Bank, based in Germany, ranks as the 16th largest in the world.
His comments match those of UBS’s Axel Weber, who said, “At this point, I‘m very cautious about bitcoin as an entity.”
European colleagues in Sweden are attempting a less-cynical attempt to head off crypto’s growing popularity, introducing a central bank-backed “e-krona.” It “would have the potential to counteract some of the problems that could arise on the payment market in the future,” stated Riksbank.
Many Unsolved Questions
“Central banks are working on this [the issue of crypto currencies] very intensively,” Swiss National Bank Chairman Thomas Jordan explained. “It is important to say it is not question of technology, but a question of who has access to central bank money and in what form. There are up to now many unsolved questions,” he warned.
Central banking seems to be on the mind of most Euro bankers when it comes to bitcoin.
No less than Mario Draghi of the European Central Bank dismissed the decentralized currency altogether, and speaking for the economic zone he said, “We think that all this is pretty limited. So it’s not yet something that could constitute a risk for central banks.” Perhaps the key phrase is “not yet.”
When added together, prominent bankers’ positions on bitcoin is best summed up by France’s BNP Paribas, ranked 8th in the world. “The potential threat to central bank seigniorage [the profit a government makes from issuing currency], worries about money laundering, financial stability, tax avoidance and crime, all make regulatory moves elsewhere possible,” the bank said.
The French bank agrees crypto’s potential threat will be slowed by what most bitcoiners believe to be its greatest asset, the lack of a central bank.