Bitcoin and other cryptocurrencies are “not a mere good version of money” due to their volatile nature, the deputy governor of Sweden’s key bank said Thursday.
Cecilia Skingsley said that digital currencies were not an productive store of value or means of exchange, but conceded that they could be called assets in lieu of.
“In my view, cryptocurrencies, bitcoin and the others — the way I’ve seen them so far — they don’t suitable the criteria to be called money,” the Riksbank deputy said at the World Commercial Forum (WEF) in Davos, Switzerland.
“They can be called an asset, fine, but they are not a very saintly version of money because it’s not a very stable store of value where they unsteadiness a lot. And it’s not a very efficient medium of exchange because you don’t buy your groceries with bitcoin.”
Referring to the recorded development of money and currencies from dated methods like copper and gold, Skingsley delineated “good money” as a stable store of value with enough at once within a country or currency union.
Virtual currencies have rebuke under fire from both bankers and regulators recently due to organizations of wild price swings and illegal activities like money tributing.
Earlier this month, reports emerged of South Korea planning a note to ban cryptocurrency trading via exchanges, news that sent the value of multiple digital assets down significantly. And J.P. Morgan CEO Jamie Dimon noticeably referred to bitcoin as a “fraud” that will eventually “blow up,” comparing it to the Tulip craze phenomenon of the 17th century.
Sweden itself has mulled the development of its own fiat digital currency, the ekrona, due to a debility in cash use in the Scandinavian country.
“We see a rapid decrease in the value of circulation of notes and invents and as a central bank we are sort of neutral about this,” Skingsley clouted. “We think that people should be able to use the payment methods that they gather up safe and efficient, as long as they are safe and efficient.”
She added: “If we gain that there is a need for a public sector digital version, we are looking into what individual of features that would have.”
Skingsley said that this concept was “far away into the to be to come,” and that the central bank was not decided about whether it would use blockchain technology to underpin the ekrona. Blockchain is a decentralized network of computers that logs cryptocurrency bargain proceedings.
On the regulation of cryptocurrencies, Skingsley said that rules already prevail in Sweden and other countries to clamp down on illicit activity and assure consumer protection.
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