I've been to quite a few bitcoin gatherings, where the standard attire is a sweaty T-shirt and sneakers. This week's Digital Currencies conference in New York was different. It felt more like a Wall Street confab than the usual fellowship of the neckbeards.
The suits were out in full force at the bitcoin convention on July 29, organized by American Banker. In attendance were representatives from Visa, Citigroup and other financial institutions.
The professionals there were by no means bitcoin faithful. Most bankers’ views on the digital currency — or virtual commodity, depending on who you ask — ranged from puzzled to noncommittal. Lester Joseph, manager of the global financial crimes intelligence group at Wells Fargo, said the bank doesn't have a grand plan for bitcoin.
“We don’t really have a strategy," Joseph said during a panel called the Nexus Between Banking and Bitcoin Companies. "We just try to understand it and try to manage the risk."
The American Banker event was more of an educational pursuit for these attendees, rather than a place to share enthusiasm or barter. Most of the attendees struggled to understand exactly how bitcoin — and an underlying system called the blockchain — work. But they were willing to spend an entire day to find out, listening to sessions on everything from regulation of bitcoin to merchants’ use of the digital currency.
The banking community's interest may indicate that bitcoin is growing up. The technology could be useful for financial institutions looking for new ways to move money quickly and cheaply. (The alternative is that savvy financiers outside of Wall Street could use it as a way to compete with the banks.) Bitcoin is also poised for its market debut in the form of an ETF, or exchange-traded fund, if the Winklevoss twins have their way.
The conference concluded with an interview with Charlie Shrem, who co-founded a startup bitcoin exchange called BitInstant. Shrem was indicted on money-laundering charges in April by U.S. federal prosecutors in Manhattan. He’s required to wear an ankle monitor and can only leave his house from Monday to Thursday between 9 a.m. and 9 p.m. For his appearance on stage this week, Shrem also wore a suit.