Bitcoin not destined for a big future, but the blockchain technology probably is.
Leading figures from the financial industry have expressed their views on the future of digital currency. Jamie Dimon, CEO at JP Morgan, and the head of the International Monetary Fund (IMF), Christine Lagarde, both claimed the cryptocurrency is unlikely to be widely used in the future.
“There will be no real-time, non-controlled currency in the world. There is no government that is going to put up with it for long,” Dimon said while speaking at the Fortune Global Forum 2015 in San Francisco.
He also noted the bitcoin market will not reach global expansion, as it will be stopped by the government. “It’s kind of cute now, a lot of senators and congressmen will say, ‘I support Silicon Valley innovation’, but there will be no currency that gets around government controls,“ Dimon said.
“It’s just not going to happen. You are wasting your time. When the Department of Justice calls and says, ‘it’s an illegal currency and it’s against the laws of the land, and if you do it again, we will put you in jail’, it’s over,” he added.
Still, Dimon noted that JP Morgan believes in the potential of the blockchain, a technology underlying bitcoin. The bank is now investigating the blockchain and its applications. “Blockchain is like any other technology. If it is cheaper, effective, works, and secure, then we are going to use it.
According to Dimon, bitcoin will not be able to compete with the US dollar. “The technology will be used, and it could be used to transport currency, but it will be dollars, not bitcoins.” he said.
One of the areas which, according to Dimon, could be enhanced with the use of the blockchain is the loan market, as it involves a lot of paperwork that could be avoided. Meanwhile, the technology is unlikely to bring significant improvements to such areas as stock market, he said.
Christine Lagarde doesn’t think bitcoin can pose any threat to traditional currencies as well, The Telegraph reported. Moreover, she says that the cryptocurrency could not be trusted. “Many of you in the [financial] industry are actually worried that those technologies are going to massively disrupt the current industry,” she said at a conference in New York.
“Pause for a second. As long as those new technologies are going to abuse and take advantage of the yield for anonymity, I think the banking industry has quite a few good days ahead of it; as long as it takes ownership of those issues of capital and culture in order to restore trust, without which no trade, no transaction, no business can take place,” she stated.
However, the adoption of bitcoin is steadily growing. Although there are fears that bitcoin is utilized for criminal purposes due to its anonymity, its price escalated to almost $500 on Wednesday, showing more than 100% increase over the past month.
