Central bankers ponder crypto future
Central bankers pondered the future of cryptocurrencies at a Money 20/20 conference in Amsterdam on Monday. The overwhelming conclusion was that cryptos did not pose an immediate threat to fiat currencies.
James Chapman, an official representing the Bank of Canada, claimed cryptos were only really a threat to fiat currencies during periods of “hyperinflation.”
However, this could support the notion that the mainstream financial community is increasingly seeing cryptos such as Bitcoin as an alternative to gold.
The yellow metal also tends to outperform during times of very elevated inflation.
The view on the attraction of digital currencies during such periods was echoed by Swiss National Bank official Thomas Moser.
Central bankers responded to the question: “Can cryptocurrencies spell the end of fiat currencies?”
Martin Etheridge, representing the Bank of England said it was an open question as to what role cryptos could play in the future. However, Etheridge claimed fiat currencies currently had the upper hand.
“I think the odds are stacked very much in favour of fiat currencies. I think it would take a pretty fundamental shift of public perception or the existing market system for it to happen,” said Etheridge.
Dr. Marius Jurgilis of the Bank of Lithuania pointed out that a central bank sponsored cryptocurrency could be an entirely different matter, saying that central banks had people’s trust on their side.
Various central banks have been considering how they could use blockchain technology in the future, some of which have joined projects run by blockchain software firm R3.