The president of the Federal Reserve Bank of Boston says he expects a winning streak for the digital currency Bitcoin to eventually come to an end.
“Personally, I’ve been surprised that Bitcoin has continued to flourish,” Eric Rosengren, the head of the regional central bank, said in an interview with The New York Times on Friday.
The digital currency is trading at more than $50,000 per coin and on Friday surged to a market value of more than $1 trillion. That increase has been helped along as big companies like Tesla and finance firms like Bank of New York Mellon increasingly embrace Bitcoin.
But Mr. Rosengren said he could not see a long-lived use case for Bitcoin in a world where central banks were likely to offer their own alternatives eventually.
“I would suspect, down the road, that a number of central banks will have digital currency,” he said. “When there is a digital currency available, other than the underground economy, it’s not clear why people would use Bitcoin.”
“I would expect, over time, Bitcoin prices to come under pressure,” he continued.
Mr. Rosengren noted that China and Sweden were well along in thinking about digital currencies, and that the Boston Fed was also researching the possibility for the United States. The Fed — and especially its chair, Jerome H. Powell — has been clear that it will tread very carefully into the digital currency space, given the important role the U.S. dollar plays in the global economy.
Some smaller central banks have been more experimental. The Bahamian central bank introduced the Sand Dollar, a central bank digital currency, last year.