Thomas Jordan, chairman of the Swiss National Bank, has made a statement about cryptocurrencies at an event held in Basel on Thursday 23 November.
Jordan said that central banks are keeping a very close eye on the issues of cryptocurrencies and that he would regard them “more as an investment than a currency”. According to a report from Reuters, he also acknowledged that there are “many unsolved questions” around the subject.
He also stipulated that central banks have a responsibility to consider the potential impact cryptocurrencies might have on the existing financial habitat. Indeed, at last year’s Sibos conference in Switzerland, he made reference to the underpinning blockchain technology, asserting that its rise is gradually turing the finance sector “on its head.”
Precisely what he meant by that comment isn’t entirely clear, but it is symptomatic of an impending change in a wider issue: banks cannot keep ignoring cryptocurrencies and hoping they will go away, even if it’s natural that the people who have got rich off the existing financial system would reject the threat of a new system coming in to shake things up.
But digital currency is not going anywhere, and its gradual incursion into mainstream markets needs to be factored in if banks want to continue enjoying the significant role they have had in society up to this point.
Jordan gave the revelation at the time that the bank was in talks with participants in the market, as well as regulators and the central banks of other countries, to ascertain what the future roles of blockchain technology and distributed ledgers might be. These technologies promise “first and foremost to reduce cost”, and such a prospect is something very few hungry bankers will be able to resist for long.