European Central Bank Vice President Vítor Constâncio believes that cryptocurrencies "never prevail as general money substitutes,” Cryptovest reported.
“The so-called private ‘cryptocurrencies’ can never prevail as general money substitutes,” Constancio said at the Financial Regulatory Outlook Conference in Rome.
“Their designation is a misnomer as they are not a currency but just a commodity used as a speculative asset and as a restricted medium of exchange in very special circumstances, comprising criminal activities or failed states with collapsed institutions,” he added.
Constancio warned against central banks backing digital currencies through distributed ledger technology like blockchain.
“The use of the blockchain by central banks to create digital currency open to all citizens without limits would be really disruptive,” he said.
“This would be a radical political choice that could end banking as we know it and is therefore unlikely to happen.”