UBS Chairman, Axel Weber, Thinks Central Banks Should Consider Digital Currencies

Axel Weber, Chairman of UBS, one of the largest global financial services company, has not shied away from criticizing Bitcoin in the past, but is now urging central banks to issue their own digital currencies.

Speaking to the Financial Times, Weber indicated that the public sector (central banks), may be left behind due to their skeptical view of cryptocurrencies, as opposed to exploring their benefits:

“Whilst the official sector very often looks at the risks of these new means of payment, the private sector tends to look at the opportunities they offer.”

He once again derided Bitcoin, calling it “simply too insignificant to matter”, but raised concerns over the use of cryptocurrencies in financing illicit activities such as money laundering and terrorism.

In his view, the right approach for banks is to consider the benefits presented by digital currencies and evolve to meet changing payment patterns, especially as the trends move towards mobile payments.

With regards to the security concerns, the UBS chairman believes central bank issued digital currencies can employ identity features to prevent illicit use, while society could benefit from the positive features, especially in regions like Africa, where it is very expensive to move money.

Weber’s view does seem in line with recent developments, such as plans for the CryptoRuble, and talks of a Digital Australian Dollar.

Last month, Axel Weber criticized Bitcoin for not meeting the requirements of a store of value:

“The important function of a currency is, it’s a means of payment, it has to be generally accepted, it has to be a store of value and it’s a transaction currency. Bitcoin is only a transaction currency.”

State-issued digital currencies, however, he feels can act as both, means of payment and stores of value, since they would be backed by national monetary authorities.