David Gledhill, group chief information officer at DBS, one of Asia's largest banks, has put his opinion forward of what Bitcoin is. Gledhill has reiterated the point that many hold, calling Bitcoin a Ponzi scheme.

However, Gledhill’s criticism is mostly aimed at the high transaction costs that Bitcoin currently has, and he goes as far as to say that should that issue be sorted - essentially a true scaling consensus be met which cuts the transaction fees, there could be more interest in it for the banks.

As Bitcoin stands presently, there is very little to entice major banks over to it, although some have taken the plunge. However, many in the crypto space believe that Bitcoin is working to solve its scaling issues and lower transaction costs and that is what the banks could be waiting for.

“Incredibly expensive for us”

After outing Bitcoin as a Ponzi scheme in his and DBS’s opinion, Gledhill addressed the real elephant in the room for many users, as well as banks who would consider integrating and adopting the digital currency.

“Bitcoin transactions are incredibly expensive and all the fees are hidden through the crypto-mechanisms," he said. "We don't think DBS being in that game right now is going to create a competitive advantage for us."

For banks, like DBS, there is currently no rush to join the cryptocurrency market as its transaction costs and speed are hampering the adoption for major banks. Rather, it makes more sense for these banks to continue competing in electronic transactions of government-backed currencies.

Essentially, the fees for such transactions are centralized and thus determined by the bank. Therefore, it makes sense for banks to have their fingers in such pies, as that is their bread and butter.


Gledhill does predict, however, that eventually, Bitcoin will sort out its expensive transactions, which will be part of its scaling. From there, the interest for banks suddenly heightens as not only will adoption across users increase, but also for merchants and traders.

There is no current advantage for banks like DBS to offer Bitcoin to its customers. Others, like Falcon bank in Switzerland, have.

However, Gledhill explains:

“Bitcoin isn't going to help DBS bring in customers, deposits or wealth management so right now, it's watch and learn."

Cautious approach

There has long been a cautious approach from institutionalized money men, from banks to investors and Wall Street types. Now, it seems for banks to try and join the Bitcoin wave, rather than quash it they want to see it have much cheaper transactions.

The transactions that occur on the Blockchain remain decentralized even if offered to a bank and thus there is nothing to be gained for a bank pushing this technology.

The money never comes to them, however, if the transactions are low, then adoption will rise and demand will be created. That higher demand will allow banks to impose some other form of fees where they can thusly profit.


It all smacks a little too much of greed from the banking sector, and a lack of understanding to bott. Indeed, Matthew Roszak, co-founder and chairman of Bloq, a Blockchain enterprise software company, responded:

"When I hear comments like that, I think a lot of folks are having their Kodak moment, where maybe they don't really understand the magnitude of this technology."