On Monday (January 25), Lloyd Blankfein, former Chairman and CEO of Goldman Sachs, said in an interview that if he were a financial regulator, he would be “hyperventilating”at Bitcoin’s “success” and “arming” himself to “deal with it.”
When asked by Sorkin if his views had evolved on Bitcoin.
Blankfein started by saying that Bitcoin was not that great as a store of value:
“It could work it, but really at the end of the day, currency is supposed to accomplish a couple of things. It’s supposed to be a medium of exchange and a store of value… It’s a store value that can move 10% in a day, that if you lose the code or you lose the slip of paper, it’s lost forever, or if somebody takes it from you, how will you know? So, it’s store of value element’s a little bit tough.“
He then complained that Bitcoin’s problem as a medium of exchange is that you cannot see who the recipient of a BTC payment is, which meant that “if it ever got big enough to be substantial and a real medium of exchange,” how would the regulators be able to deal with money laundering and “monitor who’s getting paid in the financial system.”
Blankfein admitted that Bitcoin could “work out well over the long term” but that this would mean sacrificing “the freedom of liberty and and kind of lack transparency people like about it in the first place.”
He concluded by saying:
“If I were 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.“
On 20 June 2018, during at talk at the The Economic Club of New York, Blankfein suggested that he could see a future where cryptocurrencies are accepted:
“Look at the evolution of money… you start out with gold as money and people only take hard currency and you make gold coins and a gold coin was like five dollars and had five dollars of gold.
“And eventually, they would give you a piece of paper with the promise that there was five dollars in gold to back the five dollars piece of paper and you could go in and redeem it. Then they gave you a piece of paper and said there’s five dollars of gold but you can’t redeem it. And at some point, they give you paper and say ‘it’s worth five dollars, we’re not gonna redeem it, we don’t even have the five dollars even if you want to’, and we’re still doing that today.
“I see that morphing and I’m saying that if you could go through that morphing, 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?“
He then added that he did not own any Bitcoin, but this did not mean Bitcoin could not succeed:
“And so it’s not for me.. I don’t do it. I own no Bitcoin. Goldman Sachs… has no Bitcoin but if it does work out, I could give you the historical path why that could have happened. And so, I’m not in this school of saying ‘gee, because it’s uncomfortable, maybe because it’s unfamiliar, this can happen’. That’s too arrogant.“