On the sidelines of the Web Summit conference in Lisbon, Portugal, the CEO of French banking giant Societe Generale, Frederic Oudea, spoke to CNBC about bitcoin, cryptocurrencies, and blockchain technology. According to the chief executive, cryptocurrencies are unlikely to survive long-term, as governments have problems regulating them.
Frederic Oudea revealed that he was a fan of blockchain technology, but that he believes virtual currencies are too risky, presumably for governments. The banker also pointed that their anonymity, which according to him carries too much risk, is their only advantage so far.
Notably, Oudea added that he can’t see bitcoin’s future when he takes into account its (semi)anonymous nature, stating:
“I can’t see a future of this when I see the attention played by all governments and regulators on anti-money laundering, on anti-tax evasion, on anti-terrorism financing. The anonymity of the transaction is a problem I think which would put pressure on bitcoin.”
Instead, the executive suggested a virtual currency backed by fiat would be a better idea, as cryptocurrencies would be too risky for mainstream use, despite their unprecedented popularity growth this year. He stated:
“I think we need to be a bit more precise on what we call virtual currency at the end of the day. If it’s just a way in a transaction, at some point to add something which virtually can translate on both sides into real currencies, maybe it can be used as a system. The blockchain system and the bitcoin system is very different.”
Oudea further revealed that Societe Generale has experimented with a blockchain-based trade finance platform, and that he prefers to use the words distributed ledger when referring to blockchain technology. To him, this technology is useful to secure transactions, but only when a “defined set of players is well identified.”
CCN recently covered the comments of Severin Cabannes, deputy CEO of Societe Generale, who stated that bitcoin is “clearly in a bubble.” Interestingly, Cabannes also stated that Societe Generale isn’t interested in bitcoin, only in blockchain technology.
His comments mirrored those offered by Swiss banking giant Credit Suisse CEO, Tidjane Thiam, who claimed the cryptocurrency is “the very definition” of a bubble. Other detractors, despite bitcoin’s gains and increasing popularity, include JP Morgan chief executive Jamie Dimon, who dismissed it as a “fraud” and threatened to fire employees adopting or trading the cryptocurrency, and billionaire investor Warren Buffet who warned there’s a “real bubble” in bitcoin.
On the other hand, there are prominent figures in the financial industry believe the cryptocurrency. Morgan Stanley CEO James Gorman, for example, stated that bitcoin is “more than just a fad” that “isn’t inherently bad.”
Featured image from Flickr/Web Summit.