All major financial institutions will soon be thinking about trading cryptocurrencies, according to Vikram Pandit, chairman of The Orogen Group and former chief executive officer of Citigroup Inc.
In “one to three years, every large bank and, or securities firm is going to actively think about ‘shouldn’t I also be trading and selling cryptocurrency assets?’ ” Pandit said at the Singapore Fintech Festival event in a segment with Bloomberg’s Haslinda Amin. Pandit, who led the U.S. bank during the financial crisis, co-founded investment firm Orogen in 2016.
After dismissing digital currencies for years, some Wall Street giants are warming to the idea. JPMorgan Chase & Co. and Bank of America are among U.S. banks hiring for crypto as demand for the fast-developing virtual currencies balloons. Goldman Sachs Group Inc. has started trading crypto futures and last week, the Commonwealth Bank of Australia said it will offer customers the ability to buy, sell and hold crypto assets.
Pandit has also been investing in crypto firms including Coinbase Inc., and Alchemy Insights Inc.
“My big hope is that central banks around the world understand the benefit of a central bank digital currency, and move on to accept, adopt them,” Pandit said. Moving money around the world while trying the modernize a paper-based banking system is “cumbersome” and creates a lot of “deadweight” cost, he said.
The rise of cryptocurrencies has prompted a push among central banks to explore digital currencies. El Salvador became the first country to adopt Bitcoin as legal tender in September, while countries including Nigeria have launched their digital versions of cash.
A network among multiple central bank digital currencies could create efficiencies in the tens of billions of dollars and benefit all participants, according to a recent report by consulting firm Oliver Wyman and JPMorgan.
Pandit’s vision of the not-too-distant future is “a central bank digital currency, which is available to you and me, and every other retail participant around the world,” he said.
— By Krystal Chia with assistance from Chanyaporn Chanjaroen and Joanna Ossinger (Bloomberg Mercury)