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2021-01-26 01:39:03
Jacob Fisher

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2021-01-26 01:39:03

Goldman Sachs Ex-CEO: Govs Regulation Will Undermine Bitcoin

Lloyd Blankfein thinks that government regulators are arming themselves to deal with Bitcoin.

Lloyd Blankfein thinks that government regulators are arming themselves to deal with Bitcoin.

In his latest interview with CNBC's Squawk Box, the former Goldman Sachs CEO Lloyd Blankfein said there's reason to be skeptical about Bitcoin.

Blankfein told host Andrew Ross Sorkin "It could work, but, really, at the end of the day, a currency is supposed to accomplish a couple of things. It's supposed to be a medium of exchange, and a store of value".

Blankfein explained why Bitcoin doesn't exactly emet those criteria.

- "It's a store of value that can move 10% in a day; that, if you lose a code, or lose a slip of paper, it's lost forever; or, if somebody takes it from you, how will you know? So, the store of value element is a little bit tough," Blankfein said.

More or less the market bears that out: early this month (Jan 2021) Bitcoin lost about 15% of its value OVERNIGHT. It's a famously volatile investment - Back in March of 2020 the stock amrket crash sent it from the 8000$ to 4000$. And the price saw huge jumps late last year, setting a new ATH above $40,000.

Blankfein sugested that the BTC anonymity poses a problem for regulators who are looking to fight money laundering and other illegal activities. " You don't know whether your're paying the Al-Qaeda, North Koreans or Revolutionary Guard."

While it's not a secret that Bitcoin is used to finance different criminal activities, the system isn't completely anonymous, since every transaction is available publicly, where fiat currencies remains a far anonymous option for criminals looking to stay completely untraceable.

Blankfein said that even if BTC continues edging into the mainstream, govs may counteract some of the appeal: "This could be workable, but it will undermine the freedom, liverty, and lack of transparency that people like about it in the first place. So that's the conundrum that BTC will have to deal itself out. If I were a regulator, I would be kind of hyperventilating at the success of it at the moment, and I'd be arming myself to deal with it".

Last year for Yahoo Finance interview Bridgewater's Ray Dalio pointed similar tension, saying that govs might even ban BTC if they can't regulate it effectively.