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The President of the Federal Reserve Bank of Boston has said he expects a winning streak for the digital currency Bitcoin to end.
“Personally, I was surprised that Bitcoin continues to thrive,” Eric Rosengren, the regional central bank manager, said in an interview with The New York Times on Friday.
The digital currency is trading at over $ 50,000 per coin and soared to a market value of over $ 1 trillion on Friday. This increase has been sustained as large companies like Tesla and finance companies like Bank of New York Mellon increasingly embrace Bitcoin.
But Mr Rosengren said he couldn’t see a long-term use case for Bitcoin in a world where central banks would be likely to come up with their own alternatives eventually.
“I would suspect, later, that a number of central banks will have a digital currency,” he said. “When a digital currency is available, other than the underground economy, it is not clear why people would use Bitcoin.”
“I would expect Bitcoin prices to become under pressure over time,” he continued.
Mr Rosengren noted that China and Sweden are well advanced in thinking about digital currencies and that the Boston Fed is also exploring the possibility for the United States. The Fed – and in particular its chairman Jerome H. Powell – has made it clear that it will venture very cautiously into the digital currency space, given the important role the US dollar plays in the global economy.
Some small central banks have been more experimental. The Bahamian central bank last year introduced the Sand Dollar, a central bank digital currency.
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