Money Laundering Is Why Banks Stay Away From Bitcoin - Credit Suisse CEO
(Kitco News) - No matter how high bitcoin prices go or what records they break, banks will still have “no appetite” for the digital currency because of money laundering risks, said Credit Suisse Chief Executive Tidjane Thiam.
“Most banks in the current state of regulation have little or no appetite to get involved in a currency which has such anti-money laundering challenges,” Thiam said at a news conference in Zurich Thursday.
He clarified that anonymity associated with bitcoin is a significant problem for banks that will not go away.
On top of that, bitcoin is in a definite bubble, Thiam added, as all trades are based on “speculation.”
“From what we can identify, the only reason today to buy or sell bitcoin is to make money, which is the very definition of speculation and the very definition of a bubble,” he explained.
And such speculation has “rarely led to a happy end,” Thiam pointed out.
Bitcoin surged to a new all-time high on Thursday, breaching $7,000 for the very first time. According to Kitco’s aggregated charts, bitcoin was last seen at $7,038.50, after briefly touching a high of $7,350.
In another negative comment about digital currencies, ING’s chief financial officer Koos Timmermans advised his clients not to invest in cryptos.
“Are we advising our clients to invest in this? The answer is no,” Timmermans told CNBC. “We see the superiority of cryptocurrencies in terms of a means of exchange, so that part is fine. But if you then say, 'Can you easily attach future value to it?' — and that's one of the main functions of currency — that is rather difficult because you still don't know how much the supply of this currency is connected to the demand, we don't know what the interest rates are.”
Yet, there are companies who are embracing bitcoin. In the latest example, Chicago Mercantile Exchange (CME) said earlier this week that it will be launching a bitcoin futures contract by the end of the year.
“We’ve seen pent-up demand by clients. [Bitcoin] is a story that hasn’t gone away [and] CME Group is looking to bring new products,” the company’s CEO Terrence Duffy told Bloomberg when explaining the decision to introduce the new product.
But, Duffy pointed out that CME’s model will be based on “a regulated platform that will have risk controls, margin rules, etc.,” which is different from how cryptos are traded today.
Bitcoin’s aggregate value now stands at more than $122 billion, according to Coinmarketcap, bringing the total value of all cryptocurrencies to an all-time high of more than $194 billion.