Bitcoin Forum

Bitcoin has no future because of its anonymity, SocGen CEO says

• Societe Generale CEO Frederic Oudea: Virtual currencies carry too much risk due to their anonymity
• "The benefit so far is it provides anonymity to the people who are making the transactions," he told CNBC
• He joins a long list of bank executives to criticize bitcoin and cryptocurrencies

   


Bitcoin and cryptocurrencies are unlikely to survive long-term as governments scramble to regulate them, according to the chief executive of French banking giant Societe Generale.

Frederic Oudea said that, while he was a believer in distributed ledger technology — which allows data to be stored in enormous volumes across a secure network of computers — virtual currencies carry too much risk due to their anonymity.

"The benefit so far is it provides anonymity to the people who are making the transactions," Oudea told CNBC on the sidelines of the Web Summit conference in Lisbon, Portugal, on Tuesday.

"I can't see a future of this when I see the attention played by all governments and regulators on anti-money laundering, on anti-tax evasion, on anti-terrorism financing. The anonymity of the transaction is a problem I think which would put pressure on bitcoin."

Societe Generale has itself experimented with a blockchain-based trade finance platform. But Oudea said: "I prefer to use the word distributed ledger technology and not blockchain."

Blockchain technology was originally created to serve as a digital log of all bitcoin transactions. But now companies are looking at other use cases of the technology.

Oudea said he was "not convinced" digital currencies would "see any development."

"I'm more a believer of a distributed ledger technology where you have a defined set of players (that are) well-identified," he said. "We choose this mix of crypto technology to secure transactions."

The executive suggested he was open to the idea of a virtual currency that could be backed up by fiat currency, but said that cryptocurrencies were too risky to be considered for mainstream use.

"I think we need to be a bit more precise on what we call virtual currency at the end of the day. If it's just a way in a transaction, at some point to add something which virtually can translate on both sides into real currencies, maybe it can be used as a system. The blockchain system and the bitcoin system is very different."

Crypto criticisms

Oudea joins a long list of bank executives to criticize bitcoin and cryptocurrencies.

Last week, the chief executive of Credit Suisse said that bitcoin was "the very definition of a bubble."

"I think most banks in the current state of regulation have little or no appetite to get involved in a currency which has such anti-money laundering challenges," Tidjane Thiam said.

Sergio Ermotti, chief executive of UBS, said he was "not necessarily" a believer in cryptocurrencies. But, like many other banking chiefs, Ermotti said that he believed there was "a future for blockchain technology."

Last week, bitcoin, the world's largest cryptocurrency, soared above $7,000 for the first time. A day after, it reached another all-time high, surpassing $7,400.

The cryptocurrency has also drawn regulatory concerns. Authorities in China made a decision to close down local bitcoin exchanges in September, a move that saw a temporary dip in the price.

Source: m/2017/11/07/socgen-ceo-frederic-oudea-says-he-cant-see-a-future-for-bitcoin.html]https://www.c[Suspicious link removed]m/2017/11/07/socgen-ceo-frederic-oudea-says-he-cant-see-a-future-for-bitcoin.html (https://www.c[Suspicious link removed)

It's just the chatter of a big banker who does not like that the crypto currency has violated the formed mechanism for extracting the profits of banks. Clients began to choose crypto currency and stopped servicing in banks, which inevitably brings losses to banks. Practically, most of the negative information about the crypto currency comes from representatives of large banks. Therefore, their opinion as people interested should not be paid attention.

Another banker attacking bitcoin because they are losing more customers knowing that people are more inclined to invest into something that they can have rate of return significantly huge than the banks do. It may be effective before spreading fear, uncertainty and doubt to bitcoin holders but the investors and traders knew better this time that is why even if they have been successful in making its price drop drastically months ago, they can't do it this time. Jamie Dimon's ulterior motive in spreading FUD to buy bitcoin lower have been exposed that's why this time now, banker's words have no effect to the community.

This is just a nonsense thing, Has no future yet Bitcoin is still alive @2018 and creating a lot of history. I do not know but i do feel that the FUD-producing Articles are having a party time? It's been active for the past few days, a lot of FUD articles are everywhere, I do feel that there is some agenda going on. What ever FUD-producing activities they do, they cannot shun the Bitcoin Community on continuously supporting Bitcoin.

I would think that Bitcoin is less anonymous than cash. And in comparison with digital fiat, Bitcoin is also only pseudo anonymous. A unit of exchange being anonymous has never stopped people from using it successfully. Perhaps there is confusion about where anonymity would hurt transactions. In terms of doing digital business, I think the quest for secure digital identities is already on its way. If that can be solved adequately, we should see a new economic wave now that the Internet has found its economic layer with the rise of independent cryptocurrencies .

I am not fully sure what you mean by what you said here, but I take it that you are of the opinion that the "something" that you are referring to has a "rate of return significantly huge than the banks do" is Bitcoin? If so, then you are technically right, but your reasoning is flawed. Bitcoin by itself is not a replacement for investing in order to grow your wealth. What it sounds like you are suggesting is that people with money in funds should have it in Bitcoin instead. This is a terrible idea because of how volatile Bitcoin is and how its value is not guaranteed to go up. It is simply a risky investment. It is a great idea to have it as part of your diversified portfolio, but all modesty rules should be followed in this regard. Investing in Bitcoin (or anything, really) is not immediately going to make you wealthier.

Big banks know that they cannot beat Bitcoin, so they expect banks to step in. They cry about money laundering and tax evasion in the hope that some governments will step. They are throwing in the towel in the fight against Bitcoin, even before it has actually started.

You are absolutely right, being pseudonymous and keeping immutable public ledger makes Bitcoin much less private than cash - every technique for investigating money flows for cash also applies for Bitcoin, but on top of that you can trace transactions, and in some cases it is even possible to nullify effects of mixing. But the fact that Bitcoin is digital and can't be sent to any place in the world might make it harder prosecute people, especially if local police will refuse to cooperate for some reason.

The louder banksters speak out against Bitcoin, the more afraid they are. I find it fascinating how they somewhat ingored Bitcoin years ago, but now they see there is actual demand from the regular people, they stand up.

I actually enjoy these articles, and that because of the fact that people start to understand why banks act like this. Times are changing now, where it's not just Bitcoin's speculative nature attracting people.

I have seen a recent video from a bank showing a crypto millionaire. In the comment section people go nuts on that bank, like why they are uploading crypto related content while it's something that makes banks obsolete, etc.

People get it now. :)

I couldn't be more agreed with you here. The more sarcastic thing is Jamie Dimon's daughter also joined the "Bitcoin buying parade", when his father said bad things about Bitcoin lol

Maybe, all the bankers will eventually keep their mouth shut, when Bitcoin starting to dominate global in near future...

This gentleman must be a hell of an expert on bitcoin if he cannot even tell the difference between pseudonymous and anonymous currencies.

Instead of really putting some time and energy into understanding what attracts people to bitcoin, the old lords try to safeguard the established systems.

It‘ll take time and we‘ll see ups and downs, but blockchain and cryptocurrencies are here to stay.

Off course bank executives will just give negative statements about bitcoin since it is really hurting their business. For an 8-year old technology that is giving them a threat of replacing their purpose in the world. Then what do you expect them to say?

This kind of news nowadays will not affect anymore the Bitcoin community as they are getting immunize with this nonsense and most of all we all know that Bankers really hates Bitcoin because they know that the future of online digital money is with Bitcoin and their business will be affected or maybe vanish in more years to come just like any other old technologies that has been obsolete. If he said that Bitcoin has no future because of its anonymity then he is right but in a reversible way because many people are so into Bitcoin because of its anonymity and decentralize network.

I think the Bitcoin is more traceable than the cash. It is a good tool against crime.

When bankers make such statements it makes me laugh. Let them tell how to offshore accounts, the system displays the trillions of dollars. All bitcoins have a cap. Bankers just realize that lose in the competition of bitcoin. So they make such statements. Lol.

Yes and no. But that's all relative when it comes to people's lacking understanding of Bitcoin. People just assume that Bitcoin is anonymous without doing any effort in getting to understand the very basics. Bitcoin is like a public record that everyone can look into whenever they want. Transactions can be traced back endlessly, even till the extent of knowing what pool mined these coins. Nowadays with so much regulations going through this market, people's personal identity gets attached to the coins they withdraw, so there is no anonymity whatsoever. That's why I am happy we have the ability to mix our coins to obtain an extra layer of privacy.

Perhaps he is right, because the government of any country wants to control its citizens. In the countries of the third world financial anonymity is very popular because of corruption.