Sweden’s central bank governor talks about cryptocurrency collapse: Bitcoin is like ‘trading in stamps’
(Kitco News) A new warning about a potential cryptocurrency collapse comes from Sweden’s central bank governor, who compared trading in bitcoin with “trading in stamps”.
“Private money usually collapses sooner or later,” said Sweden’s Governor Stefan Ingves at a Swedish banking conference last week. “And sure, you can get rich by trading bitcoin, but it’s comparable to stamp trading.”
Ingves stated earlier this year that cryptocurrencies will be subject to regulatory monitoring when they become more common.
Ingves joins other central bank governors who question the cryptocurrency space. In May, Bank of England Governor Andrew Bailey said cryptocurrencies could crash to zero, adding that they have no intrinsic value.
“I’m afraid they have no intrinsic value. Now that does not mean people do not value them, because they can have external value. But they have no intrinsic value,” Bailey said. “I’m sorry, I will say this very directly again: buy them only if you are prepared to lose all your money.”
In February, Ireland’s central bank governor Gabriel Makhlouf said investors who choose to buy bitcoin should be ready to lose everything they put into the cryptocurrency.
“Personally, I would not put my money on it, but it is clear that some people think it is a good bet,” said Makhlouf. “Three hundred years ago, people put money into tulips because they thought it was an investment.”
Federal Reserve Chairman Jerome Powell also commented on bitcoin’s popularity as early as February, referring to the cryptocurrency only as a speculative investment.
“What people call cryptocurrencies, they are really vehicles for speculation. No one uses them for payments, such as the dollar,” Powell said in an interview with The Economic Club of New York.
Powell also compared bitcoin to gold: “For thousands of years, people have given gold a special value that it does not have,” he said. “Yet they have done so for thousands of years.” He added that bitcoin and other cryptocurrencies “are much more so … They are not really used actively as payment.”
Around the same time, US Treasury Secretary Janet Yellen called bitcoin a “highly speculative asset” as early as February, adding that bitcoin is not “widely used as a transfer mechanism” and is an “extremely inefficient way of conducting transactions.”
The Fed and other central banks around the world work with their own digital currencies called the CBDC. The Fed said it would soon release a research article examining the pros and cons of the initiative.
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