Royal Bank of Canada: Bitcoin is not a fraud, but it does have problems

The CEO of Royal Bank of Canada said he would not call Bitcoin a scam, but he acknowledged that he does have concerns about the cryptocurrency.

Banker David McKay said:

I would never call it a scam because that would be a misrepresentation. People can value it in different ways and that’s fine, but it’s not as deceptive as people have been misrepresenting it to be.

McKay's views are in stark contrast to JPMorgan Chase CEO Jamie Dimon's repeated calls last month that bitcoin is a scam, when Dimon called bitcoin "worthless" and said investors would "pay the price." He believes that even if the price of bitcoin reaches $100,000, it will eventually crash.

However, while McKay stopped short of labeling cryptocurrencies a fraud, he did express concerns about Bitcoin.

He added:

Most of the elements that make up Bitcoin do not meet the current definition of a currency unit. There are still many practical problems regarding Bitcoin's application scenarios that we need to solve.

To address this issue, the bank has also conducted further research into blockchain, the underlying technology of cryptocurrencies.

In March, RBC became one of six banks that formed Ripple’s Global Payment Management System (GPSG), which aims to enable faster cross-border payments.

Other members of the group include Bank of America Merrill Lynch, Santander, UniCredit, Standard Chartered and Westpac.

At the time, Ripple co-founder Chris Larsen said:

Today, people want money to move at the speed of the internet, which is why we’re working with these leading banks to solve the problem of cross-border payment speed.

Royal Bank of Canada, JPMorgan Chase & Co. and Australia and New Zealand Banking Group are also working together on a project called the Network Information Interface, which aims to speed up payments on the blockchain.