Citigroup CEO: Bitcoin Threat Will Give Rise to State Cryptocurrencies

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Citigroup CEO Michael Corbat has predicted that state-sponsored digital currencies will arise from the threat posed by bitcoin.

In an interview with Bloomberg at a summit in New York yesterday, Corbat said that cryptocurrencies represent a “real enough threat” to the financial system, and that governments wont take the disruption of their capabilities around data, tax collection, money laundering and know-your-customer (KYC) “lightly.”

He continued:

“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.”

While encouraging people to go out and try using cryptocurrencies, which he said are still “pretty clunky,” Corbat argued that the underlying blockchain technology “has potential” and should not be dismissed.

Citi is already exploring its own cryptocurrency, called citicoin, which is aimed to curb friction in cross-border foreign exchange transactions. The financial group is also working with Nasdaq on using blockchain technology for trading private shares.

Corbat’s comments come soon after Goldman Sachs CEO Lloyd Blankfein said that he isn’t “comfortable” with bitcoin, but open to its potential.