Andrew Harrer | Bloomberg | Getty Images
Gary Cohn, director of the U.S. National Economic Council, speaks during a discussion at the Institute of International Finance (IIF) policy summit in Washington, D.C.
“I’m not a big believer in bitcoin. I am a believer in blockchain technology,” Cohn told CNBC’s Bob Pisani in a “Squawk on the Street” interview.
“I do think we will have a global cryptocurrency at some point where the world understands it and it’s not based on mining costs or cost of electricity or things like that,” he said. Cohn resigned in early March from his role as chief economic advisor for the Trump administration.
Bitcoin is created through an energy-intensive “mining” process that has come to require specialized computer hardware. The cryptocurrency is also the first application of blockchain technology, which eliminates the need for a third-party intermediary by rapidly creating a secure, permanent record of transactions between two parties.
The technology allows bitcoin users to send funds across borders quickly at a low cost. However, bitcoin has run into challenges such as handling high transaction volume.
Cohn expects the digital coin of the future will be simpler than bitcoin.
“It will be a more easily understood cryptocurrency,” he said. “It will probably have some blockchain technology behind it, but it will be much more easily understood how it’s created, how it moves and how people can use it.”
A surge of interest in bitcoin, and expectations of large-scale institutional investment, helped drive prices up more than 13 times last year. Bitcoin traded near $9,100 Tuesday morning.
Cohn’s former employer, Goldman Sachs, is one of a few Wall Street firms making a deliberate foray into cryptocurrencies. Last month, the investment bank hired former trader Justin Schmidt to be the first head of digital asset markets in Goldman’s securities division.
“They should do what they think’s in the best interests of their shareholders,” Cohn said of Goldman. He said he no longer owns any shares of the company.