BlackRock CEO Is ‘Big Believer’ in Bitcoin and Blockchain
The phenomenal growth of bitcoin has had at least one important consequence – it has helped shed light on money laundering, according to Larry Fink, CEO of Blackrock, Inc. In an interview with Bloomberg News, Fink said that the digital currency has helped to illustrate the extent of money laundering in the world. “It just identifies how much money laundering there is being done in the world,” he said. “How much people are trying to move currencies from one place to another.” While he is a “big believer” in the potential of cryptocurrencies, Fink is not enthusiastic about current market conditions. “What we are talking about today is speculation,” he explained. In particular, he pointed to the “systemic risk” inherent in bitcoin and digital currencies that makes them vulnerable to speculation and hacks.
Unlike its competitors in the asset management industry, Blackrock has not announced initiatives related to bitcoin and blockchain, the underlying technology platform powering the currency. “We are not hearing that from clients,” said Fink, referring to demand for blockchain-related solutions. But he did point to Aladdin, the company’s risk and portfolio management system, as being similar to a blockchain in that it connects multiple providers and sellers of financial services on a single platform. According to him, systemization of information by having multiple reference points regarding its use is good.
Some estimates peg the market for blockchain technology reaching $2.3 billion by 2021. Major banks and investment firms such as JP Morgan Chase & Co. have initiated projects to use the technology to streamline operations and provide new services to customers. For Blackrock, smart contracts designed using blockchain could help the company identify and track assets in its portfolio.