Donald Trump Might Pick This Bitcoin Optimist to Lead the World Bank
When Satoshi Nakamoto created bitcoin, a message in the cryptocurrency’s Genesis block made clear that it was a direct response to banking industry mismanagement and the financial and political structures that continued to enable it. Just one decade later, US President Donald Trump might tap a cautious crypto optimist to lead the World Bank.
Trump Considering El-Erian for World Bank President
, Mohamed El-Erian is one of several candidates that Trump has shortlisted for the job of World Bank president.
The 60-year-old El-Erian currently serves as chief economic adviser at Allianz, where his views on bitcoin have sharply diverged from those of his boss, Allianz CEO Andreas Utermann.
While Utermann has argued that regulators should “outlaw” cryptocurrency, El-Erian has called bitcoin a “disruptive” technology that could play a major role in the future of peer-to-peer transactions.
Granted, El-Erian is not exactly a crypto bull. In fact, not so long ago, he was considered a bear. In late Q3 2017, for instance, he warned that cryptocurrency investors had massively overvalued bitcoin, pricing in mass adoption much more rapidly than was feasible.
The current pricing assumes massive adoption, and I don’t think governments will allow the amount of adoption that’s currently priced in.
At that point, he said that the bitcoin price had a fair value of around $2,000, or half of its then-$4,000 valuation.
El-Erian Sticks by Bitcoin Price Target Throughout Sell-Off
According to Mohamed El-Erian, the bitcoin price has around $1,500 worth of upside relative to its current level of actual adoption.
El-Erian later raised his bitcoin price target to $5,000, though by that point the flagship cryptocurrency had already soared as high as $20,000 on some exchanges. At the time, the former PIMCO chief executive said that the cryptocurrency needed to see a “healthy” correction to remove “irrational exuberance” from the market.
That forecast came true, and 2018 proved to be an incredibly difficult year to be a crypto bull. El-Erian maintained his $5,000 bitcoin price target as the crypto market cratered, stating that it was a buy below that mark and had a role to play in the fintech sector.
What we’re getting is the realization that adoption is not going to be as big and as quick as the proponents of crypto would like. I think it’s going to be there, it’s going to last for a long time, it’s going to play a role in the ecosystem, but it’s not going to be the currency that a lot of proponents would like it to be.
A Bitcoin Ally at the World Bank?
The World Bank recently settled a $73 million bond on a private instance of the Ethereum blockchain. Could El-Erian promote further research into crypto initiatives? | Source: Shutterstock
The World Bank is an international financial institution committed to alleviating global poverty by providing loans for capital projects in developing countries.
While the World Bank executive board ultimately has the final say on who will become the organization’s next president following Jim Yong Kim’s departure, Bloomberg’s report indicates that Trump will likely have his way, so long as he selects a conventional candidate for the post.
El-Erian would certainly fit that billing, and as World Bank president it seems very plausible that he could continue to promote cryptocurrency and blockchain initiatives at the organization, even as these technologies begin to fall out of vogue.
Already, the World Bank settled a $73 million bond on an Ethereum-based blockchain, an offering that the organization billed as the “world’s first public blockchain bond.” That’s a drop in the bucket compared to the $50 billion+ in bonds that the bank issues annually, but it represents an important milestone toward the integration of crypto technology into mainstream finance.
About The Author
Josiah is an assistant editor at CCN. In a past life, he taught Herodotus and Boethius to high school students. He holds long-term investment positions in bitcoin and other large-cap cryptocurrencies. Follow him on Twitter @Y3llowb1ackbird or email him directly at josiah.wilmoth(at)ccn.com.