SNB’s Maechler – cryptocurrency hype, high volatility, speculative instrument

Swiss National Bank Governing Board member Andrea Maechler spoke overnight, I posted up some comments from her on the franc:

She also made remarks relevant to BTC et al, basically that cryptos will not replace conventional currencies:

  • “Digital central bank money for the general public is not necessary to ensure an efficient system for cashless retail payments”
  • would deliver scarcely any advantages
  • would give rise to incalculable risks (eg. financial stability)

Said the hype built up around cryptocurrencies

  • far outweighed their actual use

Money must be a viable medium of exchange and be a stable unit of account for the value of the goods and services that are exchanged, she said, adding it should also be used as a long-term store of value, for example for saving. “Cryptocurrencies such as the much-discussed bitcoin do not perform these functions adequately, if at al,”

Digital currencies had a high degree of price volatility

  • more of a speculative investment instrument than a means of payment capable of maintaining their value

Said distributed ledger technology (blockchain) had potential

Maechler
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