The world’s big financial institutions are wrestling with a cryptocurrency dilemma: whether to stand by and denounce a technology many distrust but also fear — or join those investing in it.
After a surge in the combined market value of cryptocurrencies from less than $20bn to more than $540bn, the phenomenon — and the blockchain technology that underpins it — has become impossible for the financial establishment to ignore, despite its denunciations of bitcoin in particular as “a fraud”, “index of money-laundering” and worse.
“We are sitting down around this table trying to decide whose lunch we are going to eat,” says Richard Crook, head of emerging technology at Royal Bank of Scotland. “Because blockchain’s benefits come from decentralisation there is little point replacing one technology with another without changing the business model.”