The governor of Sveriges Riksbank, Sweden’s central bank, is skeptical of Bitcoin and foresees a potential collapse looming in the flagship crypto’s future.
During a banking conference in Stockholm, Stefan Ingves says that private money like Bitcoin and other cryptocurrencies “usually collapses sooner or later” as they don’t have the backing of a government
Ingves highlights that while one can get rich trading Bitcoin, he says that it is comparable to trading stamps.
Gabriel Makhlouf, governor of the central bank of Ireland, shares the same sentiments. Earlier this year, he said he was against putting personal funds into crypto, comparing supporters to those that “put money into tulips because they thought it was an investment.”
Meanwhile, another central banker is a bit more optimistic about the rise of crypto. Benoît Cœuré, the head of the innovation hub at the Bank for International Settlements (BIS), says crypto assets pose a threat to existing banking models.
“Stablecoins are knocking on the door, seeking regulatory approval. Decentralized finance (DeFi) platforms are challenging traditional financial intermediation. They all come with different regulatory questions, which need fast and consistent answers… But make no mistake: global stablecoins, DeFi platforms and big tech firms will challenge banks’ models regardless.”
According to Cœuré, central banks must act now to design and deploy their own digital currencies.
“CBDC (central bank digital currencies) will be part of the answer. A well-designed CBDC will be a safe and neutral means of payment and settlement asset, serving as a common interoperable platform around which the new payment ecosystem can organize… A CBDC’s goal is ultimately to preserve the best elements of our current systems while still allowing a safe space for tomorrow’s innovation. To do so, central banks have to act while the current system is still in place – and to act now.”
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