Bitcoin may never gain currency with the public and could be destined to be the coin of the realm solely for hobbyists and criminals, economists said Wednesday.
‘This is the worst time in history for an alternative currency,” Anders Borg, chair of the World Economic Forum Global Financial System Initiative, said at the Peterson Institute for International Economics.
“Consumers are afraid to use it,” he added.
Daniel Heller, a visiting fellow at Peterson, said there is no indication bitcoin will replace traditional currencies
“It’s a high-risk asset. It is not a good store of value,” Heller said.
Former Deputy Treasury Secretary Sarah Bloom Raskin told the Washington D.C. gathering that consumer protection is an issue with bitcoins because they could disappear from a consumer’s account.
While bitcoins have gotten off to a limited start, with their popularity primarily with criminals, the underlying blockchain technology could become widespread, Raskin said.
Blockchains are essentially closed networks where all transactions are recorded and available to all of the participants and everyone in a chain agrees to the terms.
Speaking broadly about financial technology—an arena that includes bitcoins—Raskin said the sector has a trust hurdle to surmount before it will be accepted as a mainstream currency.
A single bad experience, with anything from electronic payments to online investing, can sour a consumer to a fintech applications, she said.