Davos: Central bankers say cryptos aren't real currencies
What in The World: Central banks eye Bitcoin's successReplayMore Videos ... (16 Videos)What in The World: Central banks eye Bitcoin's successStablecoins faltering amid crypto market volatilityA quarter of all the electricity in this county is powering Bitcoin miningBitcoin's carbon footprint is growing larger. Here's why. Cryptocurrencies take Hollywood, sports and politics by stormSen. Brown on cryptocurrency: Fraud, scams and outright theftCouple arrested for largest financial seizure by US governmentTV star has new role: Crypto criticCrypto.com buys Staples Center naming rightsCrypto: The future of money or the biggest scam?Jamie Dimon blasts bitcoin as 'worthless'Crypto experts explain how to regulate the industryWill cryptocurrency replace the dollar? Scott Galloway explainsChina's cryptocurrency crackdown intensifiesEl Salvador divided over making bitcoin legal tenderEthereum's 27-year-old founder says we're in a crypto bubble. Did it just burst?New York (CNN Business)Stablecoins are unstable. Cryptocurrencies don't act like currency. Does digital money ever stand a chance of winning the establishment's embrace?
With the prices of cryptocurrencies like bitcoin and ethereum and so-called stablecoins like Luna and TerraUSD plunging in value and hurting many investors in the process, that seems unlikely for now -- at least not until crypto starts behaving more like traditional currencies, central bankers and regulators in a panel discussion at the World Economic Forum in Davos told CNN's Julia Chatterley Monday."Bitcoin may be called a coin but it's not money. It's not a stable store of value," said Kristalina Georgieva, managing director of the International Monetary Fund.Stablecoins were supposed to be 'stable.' Then the crash cameGeorgieva said some cryptocurrencies are more akin to a pyramid scheme for the digital age because they aren't backed by real assets. But she said central bank digital currencies (CBDCs) supported by governments can, in fact, be stable.François Villeroy de Galhau, a governor with the Central Bank of France, agreed.Read More"Cryptocurrencies are not a reliable means of payment. Someone must be responsible for the value and it must be accepted universally as a means of exchange. It's not," Villeroy said, noting that some "citizens have lost trust in crypto" because of the massive volatility.He added that governments looking to adopt digital currencies must do so in partnership with large commercial banks.What is the real role of cryptos?Other panelists wondered what the long term goals of digital currencies should be. Sethaput Suthiwartnarueput, a governor with the Bank of Thailand, said that Thailand has been experimenting in the world of digital currencies. But he said it "has to be clear what problem you want to solve."Global economy faces 'its biggest test' since WWII"We don't want to see it as a means of payment," Suthiwartnarueput said, adding that cryptos are more of an investment than a medium of exchange.Villeroy mentioned that the experiment by El Salvador to use bitcoin as legal currency shows how risky it can be to embrace cryptocurrencies. "I would prefer that El Salvador citizens have access to the euro," he quipped. That said, Georgieva noted that digital money can be a "global public good" that can help people send remittances across borders. The key is for interoperability, so that it is just as easy to transfer digital currencies as it is paper-backed currencies like the dollar and euro.But panelists stressed that it will take time for digital currencies to evolve and become more mainstream for consumers, major financial institutions and governments. Lawmakers in the United States as well as the Federal Reserve are also debating the pros and cons of digitally-backed currencies. "There is no silver bullet," said Axel Lehmann, chairman of Credit Suisse (CS).Click Here To Get Funded!