Cryptocurrencies took the stage Thursday at the World Economic Forum (WEF) in Davos, Switzerland, with the global elite event featuring a discussion that centered primarily on the question of whether bitcoin is a currency.
The panel, dubbed "The Crypto-Asset Bubble," featured Cecilia Skingsley, deputy governor of Sweden's central bank; Jennifer Zhu Scott, Radian Partners principal; Neil Rimer, Index Ventures general partner and co-founder; and Robert Shiller, the Nobel Prize-winning economist. The session was moderated by Yang Yanquing, deputy editor-in-chief of Chinese finance media conglomerate Yicai.
Shiller, who previously said he thought bitcoin was too ambiguous to put a price on, called the cryptocurrency a "really clever idea" during the event, but suggested that the tech might be better applied elsewhere.
"I'm impressed by the technology," he remarked. "And it is spreading in certain quarters, there are certain people who love this. But it seems to me it's technology for something else. It's gone viral as a currency. Blockchain is important, but it's not stable."
Scott struck a critical tone, calling bitcoin "a very lousy currency." Skingsley echoed this sentiment, arguing that a currency needs to have price stability and widespread acceptance in order to be efficient.
"In my view, cryptocurrencies – bitcoin and the others – they don't meet the criteria for money. They can be called an asset but they're not a stable store of value, they fluctuate a lot, and you can't use them as a medium of exchange."
Index Ventures' Rimer called bitcoin "one of the most audacious, generous and profound inventions" that he has ever seen, pointing out that it is only nine years old. He then went on to offer a rebuttal of sorts to the more critical take.
"We're nine years into this experiment. It's gone well at times and quite poorly. It could fail completely and go to zero, but it has accomplished a number of things I think are remarkable," he said during the panel.
Scott later commented on the discussion around price movements – mentioning the rise above $10,000 in particular – as a kind of distraction to the bigger picture involved.
"The fact that people keep talking today that bitcoin is below 10,000, it's a disaster, or bitcoin is above 10,000 and that's crazy. I think the fact that bitcoin is still alive, and attracting so much attention, the fact that we're talking about bitcoin in Davos with a Nobel Prize winner, a central bank governor and a seasoned investor, I think that's a powerful tool."
While the panelists seemed to agree on bitcoin's nature, there was a note of uncertainty about its future between those on the panel.
Scott implied that a stable cryptocurrency in 10 years might look drastically different from bitcoin today, comparing it to discussions about MySpace's success a prior ago. Rimer advocated for more regulation, saying that any truly innovative technology would need to work within existing regulatory frameworks – or at least push against them "responsibly" – in order to leave a lasting impact.
The WEF event has thus far featured a range of comments from world leaders on the topic of crypto, including U.K. Prime Minister Theresa May and U.S. Treasury Secretary Steve Mnuchin.
Panel image via the World Economic Forum