21 November 2017
visit www.aciworldwide.com

Citi global head of digital strategy voices bitcoin scepticism

27 January 2015  |  8443 views  |  0 Citi digital

Speaking today at Citi's annual Digital Money Symposium event, Greg Baxter, global head of digital strategy at the US money centre bank, questioned the long-term economic viability of bitcoin as a global currency.

Sitting alongside Bob Ferguson, head of department, policy, risk and research at the FCA and Jon Matonis, founding director of the Bitcoin Foundation, Baxter said of bitcoin's economics: "People are paid a percentage of the value of the currency for mining - what happens when you hit the limit and those people no longer want to mine because there's no economic incentive? Nothing underpins the economics of it. The system we currently have is extremely low cost."

The recent slump in the value of bitcoin caused a number of coin-mining firms to suspend services or switch focus as the economic incentives behind the business hit the skids. This has been exemplified today by the slide into bankruptcy of US miner CoinTerra.

Says Baxter: "If you take all the bitcoin transaction values last year - Citi did that value in three hours of trading - the maturity of it isn't quite there yet and I can't see the economics stacking up."

As the discussion moved on to the peer-to-peer lending market, Baxter quipped: "Finally, now we're talking about products that mean something."

Giles Andrews, CEO and co-founder of Zopa, who was also part of the panel adds: "I don't think it is the currency that is interesting but the blockchain - I'm interested to see what the blockchain can do to banking core systems and accounting in general."

In June, Citi GPS, a publication owned by the group, published a report asserting that bitcoin could challenge or replace traditional payment services if adoption increases but went on to state that the security risks and price volatility could prevent it from being accepted.

Speaking to Finextra at last year's event, Baxter said of bitcoin: "At the moment bitcoin is acting more like a commodity - that undermines its value as a currency."

Comments: (0)

Comment on this story (membership required)

Finextra news in your inbox

For Finextra's free daily newsletter, breaking news flashes and weekly jobs board: sign up now

Related stories

Bitcoin price soars on Coinbase exchange launch

Bitcoin price soars on Coinbase exchange launch

26 January 2015  |  9404 views  |  0 comments | 7 tweets | 6 linkedin
Financial institutions join record-breaking bitcoin funding round

Financial institutions join record-breaking bitcoin funding round

20 January 2015  |  9153 views  |  0 comments | 14 tweets | 6 linkedin
Regulate bitcoin, but leave the blockchain alone say banking trade bodies

Regulate bitcoin, but leave the blockchain alone say banking trade bodies

20 January 2015  |  17047 views  |  7 comments | 34 tweets | 29 linkedin
Bitcoin breaches $200 mark as bubble bursts

Bitcoin breaches $200 mark as bubble bursts

14 January 2015  |  7549 views  |  1 comments | 13 tweets | 6 linkedin
No happy new year for bitcoin as prices slump and Bitstamp suspends services

No happy new year for bitcoin as prices slump and Bitstamp suspends services

05 January 2015  |  8025 views  |  3 comments | 9 tweets | 6 linkedin
As bitcoin languishes, PeerNova raises $8.6 million to refocus on blockchain

As bitcoin languishes, PeerNova raises $8.6 million to refocus on blockchain

19 December 2014  |  12382 views  |  1 comments | 7 tweets | 5 linkedin

Related blogs

Create a blog about this story (membership required)
visit www.aciworldwide.comvisit www.vasco.comvisit www.solutions.lexisnexis.com

Top topics

Most viewed Most shared
Ripple boss predicts central bank adoption of blockchainRipple boss predicts central bank adoption...
19361 views comments | 29 tweets | 31 linkedin
Singapore central bank open sources blockchain prototypesSingapore central bank open sources blockc...
13118 views comments | 16 tweets | 29 linkedin
AmEx partners Ripple and Santander for blockchain-enabled cross-border paymentsAmEx partners Ripple and Santander for blo...
11613 views comments | 15 tweets | 42 linkedin
UK cryptocurrency exchange startup launches debit card for spending bitcoinUK cryptocurrency exchange startup launche...
9440 views comments | 26 tweets | 38 linkedin
Barclays warns of unprecedented online fraud this ChristmasBarclays warns of unprecedented online fra...
9096 views comments | 15 tweets | 32 linkedin

Featured job

Competitive
London, UK (or flexible)

Find your next job