Cryptocurrencies are similar to assets and far from currencies. This is according to the Swiss National Bank President Thomas Jordan who made this statement at the World Economic Forum in Davos, Switzerland.
Over the past two years, cryptocurrencies have become major topics of discussion at numerous international events across the globe. The cryptocurrency market has experienced a bearish trend over the past year, but it has still attracted a long of attention.
According to Thomas Jordan, President of the Swiss National Bank, cryptocurrencies function similar to assets more than they do as currencies. For that reason, he does not see cryptocurrencies leading to a major change in policy making.
He further added that “These cryptocurrencies as we know them at the moment are more like assets, not really like currency. As long as we have an influence on the value of this unit of account, so the change of interest rates, the change of the size of the balance sheet, the exchange rate, etc., the power of monetary policy will remain.”
Jordan, however, noted that there is a need for regulatory bodies such as central banks to issue their own digital currencies. He stated that “If central banks really start issuing digital currencies, that will a big have an impact on the functioning of the financial system.”
Even though Bitcoin and other cryptos have been marketed as global currencies, the majority of the world leaders have pointed out their weaknesses. For now, cryptocurrencies are not considered a viable threat to the traditional banking industry.