A senior executive for Goldman Sachs believes that cryptocurrencies – at least those that might one day be created by central banks – could be “incredibly useful.”
Sharmin Mossavar-Rahmani, chief investment officer for Goldman’s Private Wealth Management unit, spoke with Business Insider in an interview published Tuesday. During the conversation, Rahmani notably remarked that “we think cryptocurrencies in their current format, meaning that in the current incarnation, are in a bubble.”
“The bitcoin prices are astronomical. Then we compare that to ether, and ether is even more astronomical,” she went on to say. “So clearly, these valuations don’t make sense to us.”
Yet on the topic of a central bank-backed cryptocurrency, Mossavar-Rahmani struck a more positive tone – even going as far to say that those prospective currencies would be more useful than the coins in existence today.
“Is there room for a digital currency, maybe sponsored by one of the major central banks like the Federal Reserve? Yes. Could it be incredibly useful? Could it reduce transaction costs? Yes. But not these ones,” she said.
Mossavar-Rahmani went on to speculate about the impact – which she characterized as small – of a potential downturn in the cryptocurrency market on the wider economy. She explained this is the case because cryptocurrencies make up less than 1 percent of the world’s Gross Domestic Product (GDP).
“So in terms of the impact, it’ll have some impact,” she said. “There are a lot of people who have set up various exchanges, infrastructure, hedge funds in that space, so obviously, they will get hurt. But it’s a very, very small part of global GDP.”
Goldman Sachs shared a report last month with more details on this area of analysis, she added.
Executive surrounded by coins image via Shutterstock
The leader in blockchain news, CoinDesk is an independent media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. Have breaking news or a story tip to send to our journalists? Contact us at [email protected].
Published at Tue, 27 Feb 2018 21:00:17 +0000