One of Asia’s largest banks has labeled bitcoin a “ponzi scheme”, joining the ranks of several legacy financial institutions pouring scorn on the world’s most prominent decentralized cryptocurrency.
Speaking at the sidelines of the ongoing Singapore FinTech Festival today, DBS group chief information officer BS told CNBC:
We see bitcoin as a bit of a ponzi scheme.
Bitcoin transactions are “incredibly expensive”, argued the banking executive, before claiming “all the [transaction] fees are hidden through the crypto-mechanisms.” However, he went on to predict that the ecosystem will eventually scale leading it to “very cheap” in the future.
Established by the Singaporean government, the Development Bank of Singapore, or DBS, is south-east Asia’s largest bank by assets and the biggest lender in the region with nearly 500 billion SGD in assets. The bank isn’t keen on adopting bitcoin to attract new customers or investors, so it’s a “watch and learn” approach, for now, the CIO revealed.
We don’t think DBS being in that game right now is going to create a competitive advantage for us.
Today’s remark isn’t the first – and certainly won’t be the last – time a banker deems bitcoin a financial scam.
In September this year, JP Morgan Chase chief executive Jamie Dimon called bitcoin “a fraud” with the added threat of firing employees “stupid” enough to engage in bitcoin trading. “It’s worse than tulip bulbs,” Dimon said, before adding for dramatic effect, “It won’t end well. Someone is going to get killed.” Last month, Russia’s economic development minister compared bitcoin’s price boom to that of MMM, arguably the most infamous Ponzi scheme in modern times with origins from Russia.
Bitcoin has long been the scorn of such contempt but the smear attacks have been of little consequence this year, wherein bitcoin price has seen value gains of nearly 690% at its all-time last week. Although prices took a big hit with a dramatic sell-off over the weekend, a recovery effort now sees bitcoin climbing back toward the $7,000 milestone. At the time of publishing, bitcoin is trading to the dollar at $6,882 (Bitfinex).
Featured image from Shutterstock.