On November 14, 2017, it was reported that Axel Weber, the chairman of the Swiss financial institution UBS and former head of Bundesbank, made statements about the opportunities that cryptocurrencies represent and urged central banks to consider creating digital versions of fiat currencies.
Weber was also formerly considered a leading candidate to run the European Central Bank and there is weight behind his statements. On the utilization of cryptocurrencies, he said, "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."
Weber's comments came on the heels of an assessment by UBS CEO Sergio Ermotti, who expressed that those of means are curious about cryptocurrencies but unwilling to bet on the new ecosystem that threatens to upset the apple cart of the existing centralized monetary network.
Recently-made statements from UBS Chief Investment Office (CIO) analyst and Executive Director Sundeep Gantori reflect that uncertainty, as evidenced by an editorial published by UBS. In it, Gantori said:
"We are highly doubtful whether they will ever become mainstream currencies. The need for companies and individuals to pay tax receipts in government-issued currency, and the potentially unlimited crypto-money supply, pose significant barriers to widespread adoption. We think the sharp rise in crypto-currency valuations in recent months is a speculative bubble."
Gantori went on to say, "People need to believe that what their cash can buy today, their cash will buy tomorrow. In order to maintain the store of value, central banks take a lot of trouble to keep a currency's value roughly stable."
In that same vein, Weber had previously commented on bitcoin's lack of "intrinsic value," as there is no asset backing it. Such sentiment would seem to explain UBS' attempts late in August 2017 – alongside six other banks, including Barclay, Credit Suisse, and HSBC – to explore the possibilities of creating so-called "utility settlement coins" that are extensions of fiat, as reported by ETHNews.
Both Weber and the CIO are optimistic about the technology behind cryptocurrencies that are currently bearing skepticism of central bank analysists. The CIO said blockchain-powered platforms are “likely to have a significant impact on industries ranging from finance to manufacturing, healthcare, and utilities."
According to Gantori, the effects of this impact will come in the form of additional global revenue. "We estimate that blockchain could add as much as US$300-400 billion of annual economic value globally by 2027."