Trading Bitcoin Is Comparable To Trading Stamps. Collapse Looming, Says Sweden Central Bank Governor

Bitcoin, and cryptocurrencies in general, has been a controversial topic for a long time. There are many words for what cryptocurrencies pretend to be but are not: decentralized, safe, fair, valuable, stable, a currency, honest, a solution, the future.

Much like many other central bankers, Sweden’s Central Bank governor is very skeptical about Bitcoin trading.

According to a Bloomberg article, the governor of Sveriges Riksbank, the central bank of Sweden, questioned the staying power of currencies without government backing. He compared buying and selling Bitcoins to trading stamps.

Speaking at a banking conference in Stockholm, Sveriges Riksbank governor Stefan Ingves argued, “Private money usually collapses sooner or later,”. Further remarking, he said, “And sure, you can get rich by trading in bitcoin, but it’s comparable to trading in stamps.”

Earlier this year, Ingves said that Bitcoin and other cryptocurrencies are unlikely to escape regulatory oversight as their popularity grows.

Related Reading | Sweden to Bring Forward Launch of State-Backed Digital Currency e-Krona

Despite his opinion of Bitcoin’s deficiencies as a currency, Ingves has taken its reputation among investors seriously. Highlighting consumer interests and money laundering as being of particular concern, the central banker conceded this June that the cryptocurrency had gotten “big enough” to merit close attention from regulators, central bankers, and lawmakers across the globe.

Ingves’s remarks are in line with what other central bankers have said about crypto. Some central bankers have compared it to the tulip bubble of the 17th century, which ended in collapse.

Related Reading | Bitcoin Outlives Tulip, Dotcom, and Every Notorious Market Bubble

In February, Ireland’s central bank governor Gabriel Makhlouf said bitcoin investors should be ready to lose all their money. “Personally, I wouldn’t put my money into it, but clearly, some people think it’s a good bet,” Makhlouf said. “Three hundred years ago, people put money into tulips because they thought it was an investment.”

Related Reading | Bank of England Governor Still Isn’t a Fan of Bitcoin

Similarly, Bank of England governor Andrew Bailey said cryptocurrencies have no intrinsic value and may crash to zero. “I’m sorry, I’m going to say this very bluntly again: buy them only if you’re prepared to lose all your money,” Bailey said. “I would only emphasize what I’ve said quite a few times in recent years. I’m afraid they have no intrinsic value,”

Around the world, central banks in countries such as China, Ghana, South Korea, Japan, and Switzerland have started researching, experimenting with, and testing the launch of Central Bank Digital Currencies. The Federal Reserve has also said it is researching the pros and cons of creating a CBDC for the United States.

Meanwhile, El Salvador made history this week by adopting Bitcoin as legal tender.