UBS chairman joins in bitcoin bashing by bankers

Reuters

Published Oct 04, 2017 10:40AM ET

Updated Oct 04, 2017 10:50AM ET

UBS chairman joins in bitcoin bashing by bankers

By Joshua Franklin

ZURICH (Reuters) - UBS Chairman and former Bundesbank President Axel Weber said on Wednesday bitcoin does not fulfil some of the most important functions of currency, the latest senior banker to express scepticism about the cryptocurrency.

"I get often asked why I'm so skeptical about bitcoin, it probably comes from my background as a central banker," Weber said at a conference organized by the Swiss Finance Institute.

"The 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's comments follow JPMorgan Chase & Co (N:JPM) Chief Executive Jamie Dimon last month saying bitcoin "is a fraud" and will blow up.

Bitcoin is a digital currency that enables individuals to transfer value to each other and pay for goods and services bypassing banks and the mainstream financial system.

While banks have largely steered clear of bitcoin since it emerged following the financial crisis, the virtual currency has a range of supporters, including technology enthusiasts, libertarians skeptical of government monetary policy and speculators attracted by its price swings.

Weber was more upbeat about blockchain, which was first developed to power bitcoin and is a shared ledger of data that is maintained by computers rather than a central authority, and said over time the idea of a digital ledger would be widely accepted.