Bitcoin, cryptocurrencies are assets, not money

Jason Alden | Bloomberg via Getty Images

Cecilia Skingsley, deputy governor of Riksbank, speaking at a Bloomberg panel in Davos.

Bitcoin and other cryptocurrencies are “not a very good version of money” due to their volatile nature, the deputy governor of Sweden’s central bank said Thursday.

Cecilia Skingsley said that digital currencies were not an efficient store of value or means of exchange, but conceded that they could be called assets instead.

“In my view, cryptocurrencies, bitcoin and the others — the way I’ve seen them so far — they don’t meet the criteria to be called money,” the Riksbank deputy said at the World Economic Forum (WEF) in Davos, Switzerland.

“They can be called an asset, fine, but they are not a very good version of money because it’s not a very stable store of value where they fluctuate a lot. And it’s not a very efficient medium of exchange because you don’t buy your groceries with bitcoin.”

Referring to the historical development of money and currencies from dated methods like copper and gold, Skingsley defined “good money” as a stable store of value with enough demand within a country or currency union.

Virtual currencies have come under fire from both bankers and regulators recently due to concerns of wild price swings and illegal activities like money laundering.