INTERNATIONAL - UBS group chairperson Axel Weber said the Swiss bank won’t trade Bitcoin or offer it to retail clients as increased regulation could lead to a “massive” drop in value.
“This is something where the price is really unclear,” Weber said in an interview yesterday with Bloomberg TV at the World Economic Forum (WEF) in Davos, Switzerland. “We fear that in the future if these investments implode and the market corrects, then investors will be looking at ‘who sold us this?’”
There’s every sign that greater oversight is on the way - South Korea is debating a potential ban on Bitcoin exchanges amid concerns over money laundering and tax evasion, while China has been at the forefront of attempting to control the technology.
The European Commission said this month it may ramp up regulation on virtual currencies because of signs of a pricing bubble. In Europe, Nordea Bank has banned its staff from trading Bitcoin and other cryptocurrencies.
There’s very little elasticity in the supply of Bitcoin, so every increase in demand results directly in an increase in price, Weber said.
He called for regulators to “zoom in” on Bitcoin, which yesterday traded at $11.076, down from a high of $18.675 on December 18.
Banking executives across Europe have expressed doubts about it as an investment.
Bitcoin is a “fake” currency and governments can’t accept a growing market of money not printed by a country, Russia’s VTB Bank PJSC management board chairperson Andrey Kostin said in Davos yesterday.