Blackrock is the world’s largest asset management firm. The CEO, Larry Fink, has made some remarkable comments about digital money and cryptocurrencies in an Interview with Handelszeitung, Zürich (1). Hearing the CEO of this key player in the finance industry talking about digital payment, is a strong indicator that the technology and the concepts currently discussed, such as Stablecoins and CBDC (central bank digital currency), will change the way how we do business.
First, he is convinced that payment transactions must be revolutionized. He thinks that the current payment transactions are clearly overpriced. The evidence is the technology that has driven huge efficiency gains – decades ago, electronic payments involved a lot of manual processing, whereas they are completely automated nowadays – but the cost is still at about 2%.
Second, Larry Fink expects a digital Euro or a digital Dollar to play a role in the future. At the same time, the big question is whether banks will still play a role when money gets digitalized. The concept is not yet really mature according to Larry Fink, since there are still a lot of questions to answer. Still, he believes that the technology allowing to digitize money is important.
Third, Stablecoins, crypto, digital payments, and Decentralized Finance (DeFi) are important topics and are here to stay. This is one of the reasons why Blackrock partnered with Coinbase, an exchange promoting the digitalization and trade of Stablecoins.
Finally, he also made a – rather cryptic – statement on Bitcoin. “If you do not believe in the system … and if you don’t believe in printing money and excessive monetary policy, and if you are afraid of the political atmosphere in a country then bitcoin currently plays the role that gold used to play.”
From my point of view, this interview is encouraging the crypto community, particularly those working on digital means of payment.
(1) Handelszeitung Nr. 40 / October 6, 2022