Bitcoin isn't mature enough for mass adoption and its economics are inherently flawed, Citi's head of digital strategy, Greg Baxter, said at a London event on digital money sponsored by the global bank.

"If you take [the value of] all bitcoin transactions last year, we did that in three hours of trading [on a Citi forex trading platform]. So I think the maturity of it – I don't think it's quite there yet," Baxter said.

Baxter pointed to bitcoin miners dropping out of the network as evidence that the cryptocurrency's economics failed to "stack up". He was building on an earlier point that technology innovators should focus their efforts on the "core" of the existing financial system, rather than its periphery.

He said:

Baxter spoke as part of a panel moderated by FT Alphaville blogger Izabella Kaminska that included former Bitcoin Foundation director Jon Matonis; Bob Ferguson, head of the Financial Conduct Authority's Policy, Risk & Research Division; and Giles Andrews, co-founder of peer-to-peer lending company Zopa.

Matonis agreed that centralised platforms would often be more efficient than decentralised systems like bitcoin, although he said the economics of using bitcoin would change if the amount of commerce going through the blockchain increased sufficiently.

"In a majority of use cases the centralised system is going to be far more efficient in doing a lot of things," Matonis said. "The thing about distributed blockchain technology is you have to determine why you need it ... transaction fees will replace miner rewards if there is sufficient commerce riding across the blockchain."

Ferguson stressed that his organisation remains neutral on emerging technologies and that the regulatory regime for cryptocurrencies in the UK is still being shaped.

"In the UK, they might be regulated for AML purposes, or they might not be regulated at all," he said. "We just have to wait and see."

Ferguson seemed to largely agree with Citi's Baxter on the point that the existing financial system would adapt to changing consumer needs and emerging technologies.

He said

Andrews took issue with the idea that the existing banking system is sufficient for consumer needs. He also lauded the potential of the blockchain as a technology that could change the way banks themselves are run.

"What can the blockchain do to banking's core system? Building on what's there and what works is a laudable aim, but so much of banking is simply broken," he said. "I think many would argue it's not fit for purpose anymore."

Kaminska repeated several critiques she has made about bitcoin on her Alphaville blog. She questioned the economics of the blockchain, saying that many costs, including transaction costs, were currently "disguised". Kaminska also argued that bitcoin isn't quite as revolutionary as its supporters claim.

Closing the panel discussion, she said:

"On Twitter I never get the last word with Jon [Matonis] ... Whenever I speak to central bankers who are interested in this area, when it comes to a decentralised ledger, they say, 'We've already got that. It's called the banking system ... we get the banks to [confirm transactions] for us, they're the miners'. So Citi, you're a miner already."