Stefan Ingves, the governor of Sweden’s central bank, said that Bitcoin’s value could collapse drastically — and compared the seminal crytocurrency to stamp collecting, undermining its validity and long-term feasibility.
“Private money usually collapses sooner or later,” he said during a banking conference in Stockholm, in remarks reported by Bloomberg. “And sure, you can get rich by trading in bitcoin, but it’s comparable to trading in stamps.”
While it’s gaining momentum and earning approval by key players in the financial tech industry, Bitcoin has simultaneously attracted increasingly scrutiny by regulators around the world. Many business heavyweights, including Elon Musk, have endorsed the digital currency, others remain unconvinced.
Different countries have vastly different outlooks toward cryptocurrency.
The Sweden news comes shortly after El Salvador officially became the first country in the world to officially adopt Bitcoin as a legal currency, for instance. And now the central bank of Honduras is considering a similar move, Reuters reports.
In China, however, cryptocurrency has increasingly become the subject of a national crackdown, with officials arguing that it’s environmentally destructive and has no inherent value. Cryptocurrencies “are not legal tenders and have no actual value support,” said Yin Youping, the deputy director of the Financial Consumer Rights Protection Bureau of the People’s Bank of China, in a press release last month, as translated by Benzinga.
China and Sweden’s central banks are not alone in voicing their doubts about the mainstream digital currency, especially given the recent trend of governments discussing the possibility of establishing their own centralized and government-backed digital currencies.
“Bitcoin, given its performance shortcomings and energy inefficiency, is in no way a relevant comparison for the sort of technology we might use in a central bank digital currency,” Bank of England’s fintech director said during a conference last month, as quoted by Coindesk
Whether central digital currencies backed by banks will fill in the gaps for those who have been endorsing Bitcoin is arguably unlikely. Bitcoin proponents argue that it’s decentralized nature is specifically what gives it value.
As ever, Bitcoin faces a steep uphill battle to enter the mainstream — and it will be fascinating to see how that plays out in the arena of international policy.