Citigroup CEO: Digital currencies deliver ‘very tangible benefits’
JPMorgan Chase (JPM) CEO Jamie Dimon called bitcoin “worthless” earlier this month, and Securities and Exchange Commission Chairman Gary Gensler has indicated a desire to regulate an asset class he describes as the “wild west.”
But Citigroup (C) CEO Jane Fraser struck an optimistic tone about digital assets in a recent interview with Yahoo Finance. She emphasized the “tangible benefits” of digital assets, like speedy transactions and transparent accounting; and she confirmed that the asset class will have a place in the “future” of financial services.
“We see benefits from the digital asset space: instant processing, fractionalization, programmability, and transparency,” Fraser told Yahoo Finance at its All Markets Summit on Monday. “Those are very tangible benefits that come from it.”
“It’s clear that digital assets will be part of the financial services and financial markets — the future of them,” she adds. “We already see clients very active in the space.”
“Real-time payments will be here in the near term, and digital currencies may be part of that future,” says Fraser, who took over as CEO in March.
‘We’re proceeding thoughtfully and with appropriate caution’
Berkshire Hathaway (BRK-A, BRK-B) CEO Warren Buffett in 2018 described bitcoin as “rat poison,” and a survey conducted by JPMorgan Chase (JPM) in June found that one-third of mainstream investment firms agree with Buffett’s characterization.
But major financial institutions have warmed up to cryptocurrency. US Bank, the nation’s fifth-largest retail bank, this month announced the launch of a cryptocurrency custody service for fund managers.
The move follows the formation of a unit at JPMorgan Chase last year devoted to projects that incorporate blockchain technology, as well as the news in May of a cryptocurrency trading group at Goldman Sachs (GS).
In May, Citigroup launched a digital assets unit of its own, which is housed within its wealth management division. But the bank is taking careful steps into the space as it manages concerns over looming regulation and client risks, Fraser said.
“I would say we’re proceeding thoughtfully and with appropriate caution here,” she says. “Why is that? There’s still a lot of questions about how the space evolves around regulatory clarity, around some of the scalability, around resiliency, certainly around some transparency, and making sure that there are the appropriate guardrails in the system, particularly for our retail clients.”
“We don’t want them participating in areas that they’re not necessarily as well equipped to understand the risks of,” she adds.