One of Asia’s largest banks says that bitcoin is currently a financial scam.
“We see bitcoin as a bit of a ponzi scheme,” David Gledhill, group chief information officer and head of group technology and operations at DBS, told CNBC on Wednesday.
Bitcoin transactions are “incredibly expensive” and “all the fees are hidden through the crypto-mechanisms,” he said on the sidelines of the Singapore Fintech Festival. “We don’t think DBS being in that game right now is going to create a competitive advantage for us.”
Instead, Gledhill said, it currently makes more sense for the bank to focus on its electronic transactions of government-backed currencies.
He is hardly the first to take a negative stance on the digital token.
Eventually, Gledhill predicted, bitcoin pricing will become “very cheap because that’s how it will scale,” adding that there’s no current pricing advantage for DBS.
DBS is Southeast Asia’s largest lender and a big believer in emerging technologies. Earlier this year, the bank said it launched a cloud-based e-learning management system powered on artificial intelligence for its employees.
Bitcoin isn’t going to help DBS bring in customers, deposits or wealth management so “right now, it’s watch and learn,” Gledhill said.
The cryptocurrency has been volatile in recent weeks, slumping to $5,507 Sunday after hitting a record high of $7,879 last week.
In response to Gledhill’s remarks, Matthew Roszak, co-founder and chairman of Bloq, a blockchain enterprise software company, came to bitcoin’s defense.
“When I hear comments like that, I think a lot of folks are having their Kodak moment, where maybe they don’t really understand the magnitude of this technology.”