Russian Bank CEO Endorses Virtual Currencies
The Bitcoin debacle usually sees Bitcoiners on one side with lawmakers and financial service providers, especially banks. on the other. It is therefore quite refreshing and exciting when a leading figure in banking circles gives his nod of approval for virtual currencies. The CEO of the largest Russian bank, Sberbank, is said to have praised virtual currencies during a discussion with journalists this week.
Yes But With Regulation
Sberbank CEO Herman Gref has also said that the bank could be open to moving in the direction of virtual currencies if the demand exists. Thus far Russia has been quite silent about its take on virtual currencies whilst many governments around the world indicated their caution and sometimes even disdain for cryptocurrencies like Bitcoin.
However, Gref admits that regulation of virtual currency is necessary. He even said that during the initial teething phase there may be one or two crashes before the proper regulations are formulated. Although a bit cautious, Gref’s endorsement raises the bar for other banks who are either have to get on the digital currency bandwagon or risk losing out.
While it may be premature to expect Russian banks to start processing Bitcoin transactions tomorrow, it is nevertheless exciting to see that the finance executives are open to the possibility. How the lawmakers will react though remains to be seen. The Swiss may be leading Europe in this regard as there is talk among the Swiss to give Bitcoin currency status.
Banks Bet On Virtual Currencies
Markets have not as yet reacted to Gref’s statements. Not in the way the Chinese government’s ban on banks dealing in Bitcoin led to it losing almost 40% of its value within a week. There was even talk about Bitcoin falling below the $500 mark, almost 50% of its previous high of $1,000. But then China has the largest number of Bitcoiners from any nation in the world.
It is interesting to see how the largest bank in Russia and Eastern Europe will shape local Bitcoin transactions in time to come. Will Bitcoin and alternative currencies like LiteCoin changing the way many think about money, sufficient support by banking institutions could make a concept into a revolution.
Multinational American-based JP Morgan Chase made waves on its own in recent weeks when it announced that it was developing its own digital currency for use with an electronic wallet. Not as exciting as having existing digital currencies like Bitcoin given the thumbs up by the big banks. Nevertheless the move is certainly underway and possibly the world will eventually see the birth of a single globally-accepted digital currency when other systems have been tried, tested, failed and become outdated.
Sberbank’s recent chatter is not its first step into the digital currency world. It has played a major role in the conversion of digital currencies into fiat currency through Bulgarian Bitcoin exchange, BTC-E. Not all hardcore Bitcoiners may be happy though. Many feel that the involvement of established institutions may eventually sabotage the digital currency movement.
In fact a large proportion of Americans under 35 years feel that government organization should not interfere with digital currency through regulation, as identified by a recent Bloomberg poll. But without regulation, reputable banks may be cautious about entering the fray.