Future Of Digital Currencies: Former Buba Head & The FT Get Horribly Muddled
Of all people…
The former head of the conservative Bundesbank believes that central banks need to embrace digital currencies and he’s concerned that they’re being left behind. This might be interesting, we thought. Axel Weber has been talking to the FT but, it turns out, he hasn’t shaken off his bureaucratic roots since he took on the Chairmanship of UBS. Instead of embracing Bitcoin, Ethereum, decentralisation and private enterprise, Weber thinks central banks, and the likes of UBS, will benefit from creating their own versions. According to the FT.
Central banks should be more open to creating digital versions of their currencies, which could offer significant benefits to society, the chairman of Swiss bank UBS says. Axel Weber is a past president of Germany’s conservative Bundesbank — and was once tipped as a future head of the European Central Bank. As UBS chairman, he is helping to drive a revolution in how banks, companies and individuals conduct financial transactions. In an interview with the Financial Times, he now worries his former public sector colleagues may be left behind.
“Whilst the official sector very often looks at the risks of these new means of payment, the private sector tends to look at the opportunities they offer,” he says.
What’s worse, a central banker or a central banker who thinks his time in the private sector makes him somehow superior to his former colleagues. Uggh. Anyway, rather than highlighting the transparency and money trail aspects of Bitcoin and its ilk, Weber sees tighter regulation to crack down on…you guessed it…the usual nefarious list of crimes which the authorities have proved incapable of policing for decades before Bitcoin was conceived. The FT continues.
The chairman argues the issue is not the volatility of bitcoin prices - the currency is “simply too insignificant to matter” from a financial stability perspective. It’s more that the threat of the crypto world financing terrorism or enabling money laundering will eventually prompt a stronger response from authorities. There is “a relatively high probability that regulators will regulate it at some point”.
Now the FT, possibly influenced by comments from Weber, begins to get itself muddled, arguing that central bank-created digital currencies would, in contrast to Bitcoin, act as stores of value. Because…they would be “backed by the monetary authorities”.