Stephen Schwarzman, CEO of investment firm Blackstone, has offered his thoughts on the euphoria regarding blockchain and bitcoin. Schwarzman labeled bitcoin an ‘odd’ investment but admitted that the notion of a blockchain is quite interesting and sound, as reported by Forbes, September 22, 2019.
Another Banking Veteran Against Bitcoin
It comes as no surprise that the CEO of one of the largest investment firms in the legacy financial system thinks Bitcoin is odd, and not a sound investment.
However, Schwarzman did admit that he has no interest in Bitcoin because he can’t understand it. To be fair, this is a refreshing admission when considering his fellow industry leaders, Jamie Dimon and Mark Mobius, who refused to admit they don’t understand Bitcoin while bashing it.
The investment veteran believes that blockchain has its pros, but it shouldn’t be applied to a non-tradeable commodity.
Looking at the all-round possibilities for an execution environment using blockchain, Schwarzman concedes that blockchain adoption is imminent.
It is easy to understand where he’s coming from when Schwarzman critiques Bitcoin. As a legacy banker, you would not expect him to support an ecosystem that is fighting against his bread and butter.
Controlled currency has always been a norm in the modern world, and Schwarzman is uncomfortable with the notion of decentralization because he’s used to a system where the government runs a monopoly on money.
Bitcoin and Criminal Activity
Despite his negative perception of Bitcoin, Schwarzman believes that if cryptocurrencies can solve the issue of controlling money supply and eradicating criminal behavior, they should be allowed to operate.
This comes in stark contrast to treasury secretary, Steve Mnuchin, who believes that cryptocurrencies inherently promote money laundering and criminal activity.
Once again, a refreshing take by a veteran banker who sees the potential in innovative technologies beyond the narratives created by the mainstream media and government.
A study earlier this year revealed that less than two percent of Bitcoin transactions are associated with criminal behavior, and that illicit trade is still fundamentally fuelled by paper currency, owing to their intrinsically private nature.
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