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Threat of Bitcoin Will Lead to State-backed Digital Currencies, Citigroup CEO


The CEO of Citibank, a bank known for innovation and excellence has echoed a realistic sentiment about the Bitcoin challenge, saying the government cannot fold its hand and watch Bitcoin and other cryptocurrencies disrupt the financial system.

The Citigroup chief executive officer (CEO), Michael Corbat, has projected that the threat posed by Bitcoin and other digital currencies in the existing global financial system will give rise to state-supported virtual currencies. He argued that governments around the world will not take the disruption caused by the cryptocurrencies in the system sitting down.

fireinthebone gathered that the banker in an interview with Bloomberg at a summit held in New York in early November 2017, Corbat claimed that Bitcoin and other virtual currencies threaten the current financial system’s capabilities around data, tax collection, money laundering and know-your-customer (KYC) protocol.

He added that various governments will introduce their own digital currencies to counter Bitcoin and the other cryptocurrencies.

"It's likely that we’re going to see governments introduce, not cryptocurrencies – I think cryptocurrency is a bad moniker for that – but a digital currency."

Corbat also cited the potential of Blockchain technology, the underlying technology behind Bitcoin and other digital currencies. He claimed that the technology has great promise and should not be taken lightly.

According to Corbat, their company is already developing its own digital currency called “Citicoin.” The virtual currency is intended to reduce or eliminate issues in cross-border foreign exchange transactions. The major financial company is also collaborating with stock exchange Nasdaq on the possible applications of Blockchain for the trading of private shares. The partnership involves Citigroup’s CitiConnect and Nasdaq’s Linq platforms.

In his opinion on the cryptocurrencies, Goldman Sachs CEO Lloyd Blankfein has claimed that he is uncomfortable with Bitcoin, but he is willing to give the virtual currency a try.

FIRE: I have said it severally that government will be forced to issue their own digital currency as it is efficient and cost effective and then compete with bitcoin as well understand how to regulate, tax and control crypto currencies and its related services.

Having Citicoin in the Lab is a confirmation of the innovation I referred to earlier about Citibank.  When many bank CEOs are busy discrediting Bitcoin, Citibank is thinking ahead.

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