Former Citigroup chief executive Vikram Pandit has come out in favour of digital currencies, stating they have potential to change the world.
Speaking in an interview with Bloomberg TV, Pandit said he is interested in the emerging technology as a source of innovation that could eventually make its way into the traditional financial sector.
“I am a believer in the fact that whether it is the virtual currency or the services around virtual currencies do have the promise of changing the world,” he said.
He went on to argue that digital currencies could leave their mark on other currencies and existing transfer mechanisms:
“The reason I like the concept of virtual currency is because it’s spawning a lot of innovation and thinking about how you transfer money around the world, how you store money, all those kinds of things. I think those developments can be used just as well for normal currency as they can for virtual currency, that’s beautiful.”
Praise for Coinbase
Pandit said he was impressed with bitcoin wallet and payment processor Coinbase after meeting with its representatives last week. He used the company as an example of a successful digital currency business that could impact financial services beyond bitcoin.
“It’s a wallet for bitcoin, but could be a wallet for ‘bityen’. It could be ‘bitdollar’, it could be ‘biteuro’ – doesn’t matter,” said Pandit.
“What’s the beauty of this particular company? They can transfer money anywhere around the world at zero cost, freely. So it is a payment system, where this payment system is cost-free versus other payment systems, which are costly.”
It should be noted that most of the advantages outlined by Pandit are not exclusive to Coinbase. They are a feature of bitcoin itself, hence they are available to anyone using the bitcoin network.
Coinbase is currently one of the biggest names in the industry. Over the weekend unconfirmed reports emerged that the company is seeking up to $60m in additional funding, on a valuation of $400m. The company processes bitcoin payments for a number of major brands such as Overstock, Expedia, DISH Network and PayPal.
Vikram Pandit started his business career at Morgan Stanley in the early eighties. Prior to that he taught economics at several US universities, including Columbia.
In 2005 he left Morgan Stanley to create a hedge fund, which was later acquired by Citi in 2007. As a result of the deal, Pandit joined Citigroup and in late 2007 he became the CEO of America’s third largest bank holding company.
His tenure was marked by the start of the 2008 subprime mortgage crisis and Citigroup’s insolvency later that year, despite receiving billions of dollars via the Troubled Asset Relief Program (TARP).
Citi returned to profitability in 2010, but not before it was forced to eliminate thousands of jobs. As a result of his role, Pandit also became one of a handful of bakers to be immortalised in HBO’s movie drama Too Big to Fail.
Pandit resigned as Citigroup CEO in late 2012, but several news outlets such as Bloomberg reported that he was in fact ousted by the board. Pandit went on to become chairman of the TGG Group in April 2014.