In a conversation at the Economic Club of New York on Tuesday, live-streamed by Yahoo Finance, Goldman Sachs (GS) CEO Lloyd Blankfein said more about his views on cryptocurrency than he has in the past.
He began by saying that when cellphones first came out, he dismissed them as a fad—the point being that he was very wrong. “So now they have cryptocurrency,” he said. “And I always thought, I can’t say why it should work. But if it did work, I’d be able to explain it in hindsight why it did.”
Then he went ahead and explained why and how cryptocurrency could go mainstream, in theory.
“I look at the evolution of money and I say, you start out with gold as money, and people would only take hard currency, and you make gold coins,” Blankfein said. “Eventually, they would give you a piece of paper with the promise that there was $5 in gold to back the $5 piece of paper, and you can go in and redeem it. Then they gave you a piece of paper and said ‘there’s $5 of gold, but you can’t redeem it’… And we’re still doing that today. And I see that morphing. And I’m saying that if you could go through that morphing—if you could go through that fiat currency where they say, ‘This is worth what it’s worth because I, the government, say it is,’ why couldn’t you have a consensus currency?”
To be clear, “It’s not for me,” Blankfein said. “I don’t do it. I own no bitcoin. Goldman Sachs—as far as I know, unless nobody told me—has no bitcoin. But if it does work out, I could give you the historical path why that could have happened. And so I’m not in the school of saying, gee, because it’s uncomfortable, maybe because it’s unfamiliar, this can’t happen. That’s too arrogant.”
Some were surprised to hear Blankfein say that Goldman Sachs has no bitcoin, since the bank plans to launch a bitcoin futures trading desk.
And some might see the last part of Blankfein’s answer as a thinly-veiled jab at some of his banking peers like JPMorgan CEO Jamie Dimon, who initially dismissed bitcoin as a “fraud” and later admitted he regrets saying that.
Compared to the vitriol about crypto over the last year that has come from big names like Dimon, Ray Dalio, Prince Alwaleed, Warren Buffett, and Charlie Munger, bitcoin believers could see Lloyd Blankfein’s cautious tone as a win.
Daniel Roberts covers bitcoin and blockchain at Yahoo Finance. Follow him on Twitter at @readDanwrite.