DAVOS, Switzerland — Central bankers and regulators from around the world are expressing doubts about the stability of stablecoins and whether cryptocurrencies actually act like currencies.
The questions were raised during the World Economic Forum in Davos in Switzerland in interviews with CNN.
"Bitcoin may be called a coin but it's not money. It's not a stable store of value," Kristalina Georgieva, managing director of the International Monetary Fund, told CNN.
According to CNN, Georgieva said “some cryptocurrencies are more akin to a pyramid scheme for the digital age because they aren't backed by real assets.” But she suggested central bank digital currencies (CBDCs) supported by governments can, in fact, be stable, the report said.
Meanwhile, François Villeroy de Galhau, a governor with the Central Bank of France, shared much the same message with CNN.
"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 told the news network. He added "citizens have lost trust in crypto" because of the massive volatility, and that governments looking to adopt digital currencies must do so in partnership with large commercial banks.
Other Observations
Other observations made during the session during the Davos meeting, according to CNN:
- 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…We don’t want to see it as a means of payment.” Suthiwartnarueput said cryptos are more of an investment than a medium of exchange
- Georgieva noted that digital money can be a "global public good" that can help people send remittances across borders, CNN reported. “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,” the report stated.