What the Financial Elite Say about Bitcoin

Cointelegraph attended Money20/20 this year, an event that brings together players in financial services from all over the world, and even some state central bank actors. This year marked the second year that Bitcoin was officially included among topics covered, and Cointelegraph asked a slew of fiat’s bigwigs what they thought of Bitcoin.

Here’s what they said:

Cointelegraph: What do you think about Bitcoin and other cryptocurrencies?

PayPal [Unnamed representative]: Really it’s just a competitor of ours. I can’t really tell you about what they have going on. It’s just another player in the marketplace. But if you want more of an answer, we can get you over to our public relations people.

Central Bank of Cyprus [Yiangos Demetriou]: It’s not money. It’s a means of exchange, which cannot be regulated. It’s something that we as regulators do not take a stance with regards to its regulation. What we do and will continue to do is to warn people about the risks involved, and if anybody wants to use bitcoins or any other cryptocurrency, they can do it, as long as they understand and realize the risks involved.

“It’s not money. It’s a means of exchange.”

Paysys Consultancy [Hugo Godschalk]: I think from a regulatory point of view, the control of this kind of money is mainly to avoid money laundering and terrorist financing. I think that is at the moment the main topic of the regulators. It is not to control the monetary volume, because they are saying it’s very homeopathic, so it [the central bank] has no influence. And that could change--if the volume will increase, then central banks are very anxious about their monopoly, and then they will take action—action to control this kind of money or to prohibit this kind of money.

“If the volume will increase, then central banks are very anxious about their monopoly, and then they will take action.”

TKB Trasta Komercbanka [Constantinos Dinos]: It’s a very interesting concept. I believe there is future, but in order to have a legitimate means of exchange, you need to have a regulated environment. I come from a regulated environment which has already seen a lot of people losing money everywhere, so we need the regulation on the financial exchange.

“I come from a regulated environment which has already seen a lot of people losing money everywhere, so we need the regulation on the financial exchange.”

Cortex MCP [Shaunt Sarkissian]: I think that they are evolving. I think that, like any currency, everyone says that these can be done unregulated. I disagree with that. I think that at some point regulation will come into the situation. And that will be good for like Bitcoin. I think the problem with Bitcoin is not the method, it’s securing the end points, to make sure the right person is paying when they are paying with Bitcoin.

“I think the problem with Bitcoin is not the method, it’s securing the end points.”

PayBefore [Marilyn Bocchio]: I have to say I’m probably more skeptical than most. The key reason being that I’m very steeped in banking in the U.S. I’m one of those folks who’ve been working on things that kind of stress the boundaries, and I’ve seen how hard it is, even for products that are bank-issued, to enter the mainstream, so I have a lot of skepticism about how fast Bitcoin and other cryptocurrencies will enter the marketplace.

“I’m probably more skeptical than most. The key reason being that I’m very steeped in banking in the U.S.”

MoneyGram [Peter Rose]: Obviously the frictionless is the value that Bitcoin brings, and obviously there’s supposed to be a low cost structure. But increasingly as you start to scale the business and really look at remittances on a global basis, all of the things that Bitcoin stands for will get complicated, because the structure of having to ‘know your customer’ and to be able to live under the regulations that governments are forcing you to live by, starts to diminish the benefits that Bitcoin does. The frictionless becomes more frictioned.

“The structure of having to ‘know your customer’ and to be able to live under the regulations that governments are forcing you to live by, starts to diminish the benefits that Bitcoin does. The frictionless becomes more frictioned.”

Overstock [Raj Karkara]: I think it’s great. Bitcoin is a great way for consumers to pay for purchases online. It’s safe, secure, and I think it will continue to grow.

Euronet Worldwide Inc. [Mike Brown]: I think they are interesting intellectually, but I question whether they’ll be successful in real life. There are some other cryptocurrencies that don’t seem to have the drawbacks that Bitcoin has. But as a group, I’m still not convinced. Blockchain, it takes six, seven more iterations before you know you’ve got a valid transfer of assets. So that opens itself up to fraud and other things.

“Blockchain, it takes six, seven more iterations before you know you’ve got a valid transfer of assets. So that opens itself up to fraud and other things.”

Vector Capital [Alok Pandey]: Still TBD, but I think that you can’t neglect it anymore and say it’s some kind of false currency.

Valoro Systems [Hiteshi Joshi]: I have regulation and compliance-related concerns, but I see that it’s an important disruption in the market. It’s premature. Until the major countries around the world start accepting it as a regulated currency and means of payment, I don’t see a pressing reason for Bitcoin today.

“I don’t see a pressing reason for Bitcoin today.”

Investnor [Fernando Valdes ]: It is the future. I believe in the future. We are working on some model solutions for Bitcoin, and hopefully we’ll be launching next year in Mexico.

"It is the future. I believe in the future.”

American Express [Jason Muncey]: It’s an interesting space. As an entire ecosystem, I think it might be lacking. We’ll be curious to see how it goes.

"As an entire ecosystem, I think it might be lacking.”

Yapstone, Inc. [Matthew Golis]: I think it’s a great opportunity for a protocol, the network aspect of it, though I don’t know if the currency is going to survive. But I do love the infrastructure they’re putting in place for an alternative network.

Cointelegraph: The blockchain technology?
Matthew Golis: Blockchain? Sorry, I don’t know what that is.

“Blockchain? Sorry, I don’t know what that is.”

Cheers, Jeers and Everything In Between

The most-used word in the answers to what the financiers think of Bitcoin? “Interesting.” Most people interviewed, whether they thought blockchains were fantastic or in need of centralized “regulation,” said that Bitcoin is interesting.

Many also made the false assumption that Bitcoin is somehow unregulated. As anyone who understands the protocol knows, Bitcoin is self-regulating through mathematics. Human greed, error or blatant sabotage have little to no chance to harm consumers or merchants via Bitcoin, because the protocol simply doesn’t allow it.

What do you think? Do financial “elites” need to get on board in order for Bitcoin to bring frictionless, borderless finance to the world? Or can cryptocurrency continue to bless humanity without them?

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