Digital Currency Group (DCG) Founder and CEO Barry Silbert was recently interviewed on RT’s Keiser Report, and he shared his thoughts on the recent trends for Bitcoin in the banking industry. At one point during the conversation, Host Max Keiser brought up JP Morgan Chase CEO Jamie Dimon’s comments related to bitcoin, in which he referred to the digital commodity as a waste of time. Silbert was able to point out where he thinks Dimon goes wrong on bitcoin, but he also shared an interesting perspective on the relationship between banks and Bitcoin companies as a whole.
Silbert Sees Existing Financial Institutions as Partners
Although many people view the legacy banking system and Bitcoin as natural enemies, it appears that Silbert does not see it that way. During the interview, the founder of SecondMarket explained that traditional financial institutions should be viewed as partners in the further development of Bitcoin and other blockchain technologies:
“What DCG does is we start and invest in Bitcoin and blockchain companies. We’ve now invested in 59 companies around the world — making us the most active investor in the space. We raised money ourselves from MasterCard, CIBC, CME Group, Transamerica, and New York Life. We view the incumbents, we view the existing financial establishment as partners in this journey.”
What Jamie Dimon Gets Wrong
When speaking specifically to Jamie Dimon’s comments on bitcoin lotteries, Barry Silbert attempted to point out the vital flaw in the JPMorgan CEO’s argument. Although Dimon believes that governments around the world will never allow the proliferation of currency outside of their control, Silbert explained that these legal institutions may not have a choice in the matter:
“I think Jamie — who I’ve spoken to about this in the past — he has a view that governments around the world and central banks around the world are going to figure out a way to crack down on use of non-fiat currency, and I think where Jamie is probably less informed is around the inability for governments and banks to actually do that. In the case of Bitcoin, there’s no one to put in jail, there’s no company to shut down . . . If society decides that bitcoin is money, there’s nothing that JPMorgan, the Federal Reserve, or anybody [else] can do to stop it. But it’s still very early.”
Although the security of the blockchain Bitcoin wallets is likely to improve over the long term, it’s important to note that there are still a few ways in which governments could attack the peer-to-peer digital cash system right now. There could be political challenges involved with any government-sponsored attack on Bitcoin, but the reality is finding a way to at least weaken the digital payment system is not an impossibility at this time.
Banks Have Bigger Issues Than Bitcoin
Barry Silbert also made a note on the competitive threat that banks and other financial institutions could face from Bitcoin. In his eyes, the banks have other issues that are more pressing right now:
“It is a competitive threat, but I think the banks have bigger issues that they need to solve for as to the role that they’re going to be playing in the capital formation process ten years from now. They’re being completely disintermediated on the lending side, on the trading side, and the investment management side. I think Bitcoin is the least of their worries.”
For now, it’s obvious that banks are definitely viewing blockchain technology as a point of interest that needs to be researched and fully understood. Blockchain techies are of the opinion that though cryptocurrency wallets hold the future, the forex trading companies are likely to benifit from this blockchain technology revolution.
What banks will do with the technology going forward still seems to be up in the air.
Featured image via RT.
Kyle Torpey is a freelance journalist who has been following Bitcoin since 2011. His work has been featured on VICE Motherboard, Business Insider, RT’s Keiser Report, and many other media outlets. You can follow @kyletorpey on Twitter.