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Blockchain, cryptocurrencies, and insider stories by TNW.

Financial bigwigs are still shitting on Bitcoin

But they love, love, love blockchain

Bitcoin blockchain

For years, financial bigwigs have criticized cryptocurrencies such as Bitcoin, BTC while often lauding its underlying blockchain technology.

At times, their negative comments about cryptocurrency have been followed by their institution’s active interest in decentralized ledger technology – with some going as far as filing cryptocurrency-related patents and launching blockchain-based pilots.

With this in mind, we decided to take a look at some of the comments made by prominent heads of financial institutions to try and get a better idea on where they stand on the topic of cryptocurrencies and blockchain technology.

Warren Buffett

First up, business magnate Warren Buffett, who made headlines this week after saying Bitcoin was a delusion.

CEO of investment conglomerate Berkshire Hathaway

Speaking to CNBC’s Becky Quick, the billionaire chairman and CEO of investment conglomerate Berkshire Hathaway, said: “…blockchain is important but Bitcoin has no unique value at all.”

“It doesn’t produce anything, you can stare at it all day and no little Bitcoins come out or anything like that,” Buffett added.

Buffett’s latest comments about Bitcoin won’t come as a surprise to die-hard cryptocurrency enthusiasts, as he initially dismissed the digital currency as early as 2014.

At the time, Buffett told investors to avoid the cryptocurrency and referred to it as “rat poison squared.”

Despite Buffett’s personal opinion on Bitcoin, BNSF Railway Co – a unit within the Berkshire Hathaway conglomerate – in 2017 announced it had become the first major US railroad to join the Blockchain in Transport Alliance, a group tasked with finding out how best to apply cryptocurrencies and decentralized ledger tech in the transport industry.

Jamie Dimon

American business executive and billionaire Jamie Dimon has long been dismissive of Bitcoin.

Back in 2015, Dimon shed doubt on Bitcoin’s potential for long-term survival.

Speaking at the Fortune Global Forum, he said people were wasting their time with digital currencies such as Bitcoin, adding:

“This is my personal opinion, there will be no real, non-controlled currency in the world. There is no government that’s going to put up with it for long […] there will be no currency that gets around government controls.”

Some two years later, in September 2017, Dimon called Bitcoin a fraud, but backpedaled on his criticism somewhat in January the following year, saying he regretted his comments.

Although critical of Bitcoin, Dimon did say he thought blockchain was real during the same interview with Fox Business, but highlighted he was still concerned about “how governments are going to feel about Bitcoin when it gets really big.”

JPMorgan Chase, the company Dimon is chairman and CEO of, recently announced plans to launch a new digital asset, which many said was a cryptocurrency (but, it’s not).

Vitor Constancio

Portuguese economist Vitor Manuel Constancio served as the vice president of the European Central Bank (ECB) from June 2010 until May last year.

In December 2016, news surfaced that the ECB was exploring the use of distributed ledger technology alongside Japan’s central bank. It also created an internal task force focused on the technology.

Then, in September 2017, Constancio said: “Bitcoin is a sort of tulip. It’s indeed an instrument of speculation for those that want to bet on something that can go up and down 50 or 40 percent in a few days but certainly not a currency, and certainly, we don’t see it as a threat to central banking or monetary policy, that’s for sure.”

Mario Draghi

Italian economist Mario Draghi served as the president of the ECB since 2011 and has previously said it’s not the institution’s job to regulate cryptocurrencies.

Draghi made the comments as part of the #AskDraghi video series ran by the ECB, saying: “It’s not the ECB’s responsibility to do that.”

During the clip, Draghi said he would think “carefully” prior to purchasing Bitcoin, nothing he didn’t perceive to be a currency. “While the euro’s value is stable,” he added, “the value of Bitcoin oscillates wildly.”

Draghi also blasted Bitcoin’s decentralized nature. “The euro is backed by the European Central Bank. The dollar is backed by the Federal Reserve. Currencies are backed by central banks or their governments. Nobody backs Bitcoin.”

This, however, was not the first time Draghi commented on the lack of regulation in the cryptocurrency space. Back in September 2017, he said the ECB had  “no power” to regulate Bitcoin and the following November Draghi went on to say cryptocurrencies had a  limited impact on the world’s economy.

More recently, Draghi debunked rumors that the ECB was looking to issue a digital currency. In a letter sent to Mr. Jonás Fernández, a member of the European Parliament, Draghi confirmed the central bank was analyzing the consequences of issuing a Central Bank Digital Currency but explained why there were no plans to launch one.

Brian Moynihan

Last but not least, Bank of America’s chief executive officer Brian Moynihan, said: “There ought to be a hard look at the policy of anonymous currencies, because the ability to track information of money flowing is one of we use seriously against terrorism and as a [tool] against improper, illegal behavior.”

Moynihan’s comments couldn’t be more explicit, yet they seem quite jarring considering Bank of America was, at one point, the bank with the most blockchain patents.

Its first blockchain-related patent was submitted in March 2014 and published by the US Patent and Trademark Office over a year later, in September 2015. The patent application didn’t include the word blockchain, but it depicted a system where funds were sent between accounts by leveraging cryptocurrencies’ underlying technology.

Then, in March 2016, the Bank of America, a member of R3’s blockchain consortium, revealed it was working to create a blockchain-based trial centered on trade finance.

Bitcoin bad, blockchain good

It’s perfectly plausible for individuals to weigh in on the cryptocurrency debate, and while their personal opinions don’t always align with that of the companies they lead or represent, it’s not surprising these businesses are keenly exploring the potential of a technology which has so far promised to maximize efficiency and deliver better returns.

Bitcoin, on the other hand, have long suffered from a branding problem, with many critics set on diminishing its long-term potential based on the fact that it’s used to fund ilicit activity.

With this in mind, will mainstream finance continue to be enamored with blockchain technology in detriment of Bitcoin? I think so – the fear of missing out on the next wave of innovation is real, but so is the angst about a competitor having a better bottom line.

 

Want to find out more about cryptocurrencies and blockchain technology? Check out our Hard Fork track at TNW 2019!

Published February 27, 2019 — 09:11 UTC