One of Asia’s largest banks has labelled bitcoin a “ponzi scheme” riddled with hidden costs, joining a number of banks worldwide which have expressed several concerns over the cryptocurrency.
Speaking to CNBC on the sidelines of the ongoing Singapore Fintech Festival, group chief information officer and head of group technology and operations at DBS Mr David Gledhill said: “We see bitcoin as a bit of a ponzi scheme.”
He noted that bitcoin transactions are not only costly and that “all the fees are hidden through cypto-mechanisms” as he flatly laid out the bank’s stance.
Mr Gledhill said: “We don’t think DBS being that game right now is going to create a competitive advantage for us.”
Instead, he said that the bank prefers to focus on its electronic transactions of government-back currencies.
While DBS, which is Southeast Asia’s largest lender, has a long track record of implementing new technologies in his processes, Mr Gledhill said that right now, it’s a “watch and learn” situation with bitcoin.
Bitcoin slumped to $5,507 on Sunday (Nov 12) after reaching a record high of $7,877 last week, but it’s showing no signs of slowing down.
The firm, DRW, has been in the bitcoin game since 2014, and already regularly facilitates bitcoin trades in the $1 to $5 million range with trades in the $20 to $50 range being viewed as the “gold standard” ceiling.