As a virtual currency, bitcoin can be used to move money around the world without the need for a central authority, such as a bank or government, which is a double-edged sword, said Steve Grob, director of group strategy at Fidessa.
“There is no backstop. If suddenly tomorrow everyone decided bitcoin was worthless, it would be worthless, and I’m not sure whether people have really thought that one through,” he said.
Traditional banks remain skeptical of dealing with bitcoin exchanges. Earlier this year, Wells Fargo & Co (WFC.N) stopped processing wire transfers for an exchange called Bitfinex, leaving customers unable to transfer U.S. dollars out of their accounts, except through special arrangement with the exchange’s lawyer.