The chief information officer of one of Asia’s largest banks, DBS, has made his bank’s official position on bitcoin known, bluntly.
“We see bitcoin as a bit of a ponzi scheme,” David Gledhill, group chief information officer and head of group technology and operations at DBS, told CNBC on Wednesday.
Bitcoin transactions are “incredibly expensive” he noted — and “all the fees are hidden through the crypto-mechanisms,” he said on the sidelines of the Singapore FinTech Festival. “We don't think DBS being in that game right now is going to create a competitive advantage for us.”
Gledhill noted that instead, his bank would rather focus sharply on its electronic transactions of government-backed currencies.
Eventually, Gledhill said, for bitcoin to scale its pricing, it will have to become “very cheap.” Minus any sort of pricing advantage, he noted, bitcoin offers a lot of expensive risk and not a lot of tangible upside for the bank.
DBS is Southeast Asia’s largest lender and has a long track record of embracing new technology. Earlier this year, the bank launched a cloud-based eLearning management system powered on artificial intelligence for its employees.
Bitcoin doesn’t have much potential at present, meaning DBS is content to let it be for the time being.
“Right now, it’s watch and learn,” Gledhill said.
The cryptocurrency has been volatile in recent weeks, slumping to $5,507 on Sunday (Nov. 12) after hitting a record high of $7,879 last week.
Matthew Roszak, co-founder and chairman of Bloq, a blockchain enterprise software company, took issue with Gledhill’s characterization of bitcoin.
“When I hear comments like that, I think a lot of folks are having their Kodak moment, where maybe they don’t really understand the magnitude of this technology.”