Regulators should be worried about Bitcoin: Goldman Sachs

Goldman Sachs senior chairman, Lloyd Blankfein, stated that regulators should be concerned about the recent Bitcoin rally

Yesterday, the CEO of Goldman Sachs argued that Bitcoin presents an obstacle to financial regulators looking to monitor the sector. He explained that regulatory bodies might soon be incapable of managing the finance sector if they allow the leading crypto asset to continue thriving. In his opinion, regulators ought to be ill at ease with Bitcoin, especially now that it is becoming popular by the day.

Speaking on CNBC’s Squawk Box program, Blankfein explicitly implied that the digital asset was undermining regulators. He specifically referenced Bitcoin’s relative anonymity, claiming it sabotages efforts made to regulate the financial system. He added that asset’s application as a medium of exchange makes it ideal for illicit and criminal activities in the industry.

“You don’t know whether or not you’re paying the North Koreans, or Al-Qaeda, or the revolutionary guard,” he said.

Blankfein’s claim seemingly contradicts the common knowledge that authorities have previously tapped on blockchain’s transparency to track crypto use by criminals.  The Goldman Sachs chief canvassed that regulators should not allow Bitcoin and other crypto assets to proliferate and thrive in their current form.

“If I were a regulator, I would be kind of hyperventilating at the success of [Bitcoin] at the moment, and I would be arming myself to deal with it.”

Based on his remarks, Blankfein is far from convinced that Bitcoin is an ideal store of value. He disapproved of the asset citing its price volatility and the technological literacy necessary to handle crypto.

“It’s a store of value that can move 10% in a day, that if you lose the code or if you lose the slip of paper — it’s lost forever, or if somebody takes it from you — how will you know.”

Blankfein proposed the limitation of several fundamental freedoms enabled by Bitcoin (pseudonymous privacy features) to manage the asset. This could, however, have a negative impact and impact the asset’s performance, particularly its market demands.

“This could be workable, but it will undermine the freedom and liberty and kind of lack of transparency that people like about it in the first place. So that’s the conundrum that Bitcoin will have to deal its way out of.”