Central bank governors and other financial leaders are lining up to criticize cryptocurrencies at the World Economic Forum in Davos, Switzerland, saying digital coins and tokens are not legitimate currencies.
During a panel discussion, several central bankers and regulators criticized cryptocurrencies ranging from Bitcoin (BTC) to stablecoins such as Luna (LUNA), and noting the price plunges that have occurred this year amid a broad stock market downturn.
“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 (IMF).
Georgieva said some cryptocurrencies are more like a pyramid scheme for the digital age because they aren't backed by real assets. But she said central bank digital currencies supported by governments can be stable and have lasting value.
François Villeroy de Galhau, a governor with the Central Bank of France, agreed, saying “Cryptocurrencies are not a reliable means of payment.”
He added that governments looking to adopt digital currencies must do so in partnership with commercial banks.
Other panelists speculated about what the long-term goals of digital currencies should be. Several panelists cited the experiment by El Salvador to use Bitcoin as a legal currency as an example of how risky it can be to embrace cryptocurrencies.
But panelists stressed that it will take time for digital currencies to evolve and become more mainstream for consumers, financial institutions, and governments.
The price of Bitcoin, the world’s biggest cryptocurrency, has fallen nearly 40% this year to just over $29,000 U.S.
