While the value of bitcoin is again at it’s peak, the banking sector has its reason to doubt and malign the reputation of the cryptocurrency. Recent claims made by one of the most important banks in Southeast Asia pour more doubt on the inefficacy of digital currency.
DBS Criticizes Bitcoin
On 14 November, The Development Bank of Singapore (DBS) group Chief Information Officer, David Gledhill, told CNBC that they, “see bitcoin as a bit of a Ponzi scheme.”
Bitcoin transactions are incredibly expensive and, “all the fees are hidden through the crypto-mechanisms,” explained Gledhill. “We don’t think DBS being in that game right now is going to create a competitive advantage for us.”
But if you ask a bank to move $100,000 from one country to another, the fees offered by bitcoin would be much lower than the bank.
For example, legally moving money out of India is a very daunting task because of various rules, FEMA guidelines, unfair conversion rates, and fixed fees. With bitcoin, one can move value across the world much more effectively.
On top of that, there are various tools available online to help predict bitcoin transfer fees depending on the time you can afford a transaction to confirm.
According to Investopedia, a Ponzi scheme is a fraudulent investing scam promising high rates of return with little risk to investors. The common characteristics of a Ponzi scheme are: promises of very high returns on investments, return rates independent of market performance, and little to no clarity on investments.
When analyzing bitcoins, we observe that they follow only a few of these features. For instance, bitcoin is very much at risk in the market, does not guarantee any percentage of return, and the whole project is open source.
DBS’s claims are obviously not the first time when someone has attacked bitcoin. In September 2017, Jamie Dimon from JP Morgan also criticized bitcoin by calling it a fraud while warning to fire employees who are “stupid enough to trade Bitcoins.”
Regardless of the sentiments shared by top bankers, bitcoin refuses to deviate from its upward trajectory. Bitcoin was trading around $4,200 in September while trading closer to $8,000 at the time of writing.
Not Everyone is in Denial
The future seems to belong to bitcoin and investors from all parts of the world are investing in the currency. It is no longer an exclusive purchase by tech wizards, but now more of a commodity in which people in various professions and walks of life are investing.