American Express chief executive officer Kenneth I. Chenault, expressed his position on virtual money while speaking at the DealBook conference that was held in New York City on Thursday.
The event gathered professionals in the finance, government, investment and law sectors to discuss the present political and economic situation and the future of the world economy.
Bitcoin proponents see the future in the digital currency and expect it to change the global payment system by allowing simultaneous cross-border transactions. However, Chenault is not so enthusiastic about the virtual money, according to the New York Times.
“The reality is, we compete with any form of payments,” he noted. “Everyone focuses on the displacement of Bitcoin and the credit card industry.”
Chenault added there are reasons that credit card exist, and one of them is that they let people to defer payments.
When giving an interview on CNBC back in January, JPMorgan Chase CEO Jamie Dimon called cryptocurrency “a terrible store of value” and added that JPMorgan would not have much to do with bitcoin.
“The question isn’t whether we accept it. The question is do we even participate [with] people who facilitate bitcoin?” he said in an intwrview. “The people who are going to eventually really get upset with it will be governments.”
Dimon said bitcoin would have to comply with the standards, followed by other payment systems, and it would be the end of digital currency.
Chenault admitted the technology behind bitcoin has huge potential and will play an important role in the industry. He compared alternative currencies with such services, as iTunes and Napster, pointing out to its potential to fuel the changes in the industry.
Speaking on the new types of money, Chenault said: “I don’t know how this is going to evolve. I think there’s room for a lot of players.”
Some bitcoin supporters argue that bitcoin will enable credit card firms to save money, which could be afterwards passed to their customers. At the same time, digital currency opponents argue that credit cards are more secure and ensure fraud protection.
American Express’s peers, Citibank and MasterCard, have contrary opinion on bitcoin. Citibank even called it a “fiat currency” in his report on bitcoin and gold.
In the meantime, the former American Express General Manager, Ed Boyle, has launched Blade Financial on December 10th. It is a B2B-oriented payment processing service that supports bitcoin debit cards. The service will enable cryptocurrency companies to spend bitcoin at a wide range of international merchants.
Boyle is aimed at simplifying the process of using bitcoin and expand its adoption worldwide.
“It’s the age old chicken and egg problem: which comes first, merchants or consumers?” he said in a press release. “Blade takes away half of the equation by fully solving for the merchant side.”
It is now evident the banking industry has yet to embrace the virtual currency.