The chairman of UBS has claimed that, according to him, bitcoin does not fulfill the functions of a currency.
UBS Chairman and former Bundesbank (Germany’s central bank) president Axel Weber was speaking at a financial conference in Zurich this week when he played down the potential of bitcoin, a decentralized cryptocurrency completely independent of a central authority.
In statements reported by Reuters, the senior banker claimed his skepticism of bitcoin “probably comes from my background as a central banker.”
He went on to explain:
The most important function of a currency is, it’s a means of payment, it has to be generally accepted, it has to be a store of value and it’s a transaction currency. Bitcoin is only a transaction currency.
Weber has previously claimed that private currencies like bitcoin will “always be boom and bust…because there is no lender of last resort,” according to a City A.M report in November 2015. The ‘lender of last resort’ is a role typically taken by a central bank where the entity has the authority to change the supply of money during a financial crisis.
Weber’s comments about bitcoin come in the weeks following the much-publicized comments by JP Morgan CEO Jamie Dimon who called bitcoin “a fraud” that is “worth nothing”. Other major Wall Street figures, such as Goldman Sachs CEO Llyod Blankfein revealed a more neutral take on bitcoin in a public social media post this week.
Conversely, Morgan Stanley CEO James Gorman recently called bitcoin “a fascinating development that’s certainly something more than just a fad.”
Featured image from Flickr/INSM.