Citibank executives: investing in Bitcoin is like investing in horse racing, art and wine

In an interview with Finextra TV, Tony McLaughlin of Citibank’s new payment and business development department talked about his views on Bitcoin, the central bank’s Crypto currency and Facebook’s stablecoin project Libra.

He compared Bitcoin with the central bank Crypto currency being developed in China, Sweden and other countries. McLaughlin said, “The central bank Crypto currency will not be a proof-of-work consensus mechanism used by Bitcoin. It will be a near-centralized system, not Will be open to anonymous users running nodes. “

McLaughlin said the same is true of private cryptocurrencies like Libra. The disadvantage of the proof-of-work consensus mechanism is that it requires a lot of energy to drive the computer used to solve the mathematical problem to win the right to add the next block to the ledger. This makes crypto mining a very expensive task, and now that Bitcoin has experienced the third block reward “halving”, miners’ returns may decrease, which may make it unsustainable.

Nevertheless, he still does not hide his love for Bitcoin. He mentioned, “I have a good opinion of Bitcoin, and its ideology is pure, especially the utopian idea as a world currency.”

Bitcoin is not negatively affected by the financial stimulus of the government and the central bank. It provides a useful diversification tool for the portfolio to fight inflation. McLaughlin said, “Bitcoin is an unrelated asset, so bitcoin is acceptable, although bitcoin has some major deficiencies in payment.”

He pointed out, “Although the application of bitcoin in payment has not yet begun. It is still a speculative or alternative asset, just like people invest in horse racing, art and wine.”

In the past year, many traditional banks are actively exploring the blockchain field. Citibank has partnered with distributed ledger technology company Komgo to build a blockchain-based infrastructure for the financial industry. Kris Van Broekhoven, global head of commodities trade financing at Citigroup, said that digitization of trade is one of the main reasons for the cooperation between Citi and Komgo.

In addition, search giant Google plans to provide a checking account by cooperating with banking giant Citigroup and Stanford University Credit Cooperative. Anand Selva, head of U.S. consumer banking at Citigroup, said the partnership with Google will keep the bank free from physical branches. “We must always be by our customers.”

Image source: citibank

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