The Boston Federal Reserve Bank chairman said he expects a winning streak for the digital currency Bitcoin to end.
“Personally, I’m surprised that Bitcoin continues to flourish,” said Eric Rosengren, the head of the regional central bank, in an interview with The New York Times on Friday.
The digital currency is trading at more than $ 50,000 per currency and on Friday it reached a market value of more than $ 1 trillion. This increase was helped along with big companies like Tesla and financial firms like Bank of New York Mellon increasingly adopting Bitcoin.
But Rosengren said he did not see a lasting use case for Bitcoin in a world where central banks would likely offer their own alternatives in the future.
“I would suspect, in the future, that several central banks will have digital currency,” he said. “When there is a digital currency available, unlike the underground economy, it is not clear why people would use Bitcoin.”
“I expected Bitcoin prices to come under pressure over time,” he continued.
Mr. Rosengren noted that China and Sweden were well advanced in thinking about digital currencies and that the Boston Fed was also researching the possibility for the United States. The Fed – and especially its president, Jerome H. Powell – has made it clear that it will move very carefully into the digital currency space, given the important role that the US dollar plays in the global economy.
Some smaller central banks have been more experimental. The Bahamas central bank introduced Sand Dollar, a central bank digital currency, last year.