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Currencies

Davos panelists don't believe the bitcoin hype

Robert Shiller says the 'interesting experiment' gets too much emphasis

Bitcoin's dramatic rise made it a hot topic in Davos this year, with a prominent market bubble researcher and a Swedish central banker expressing doubts about the cryptocurrency's prospects.

"I tend to think of bitcoin as an experiment," said Yale University professor Robert Shiller, a winner of the Nobel Memorial Prize in Economic Sciences, in a panel discussion Thursday at the World Economic Forum's annual meeting. "It's an interesting experiment -- it's not a permanent feature of our lives. We're overemphasizing bitcoin."

The "Irrational Exuberance" author stressed the importance of such fintech innovations as the blockchain technology underpinning bitcoin. But he was less impressed with the cyrptocurrency itself, calling it selfish.

Cecilia Skingsley, a deputy governor at Sweden's central bank, was also skeptical. Bitcoin does not meet the criteria to be called money, said Skingsley, who cited swings in value and inefficiency as a medium of exchange.

Skingsley heads a project by the central bank to study the introduction of a centralized e-krona. Cash is going out of fashion quickly in Sweden, she noted.

But she also argued that "it's much better" to have "a trustworthy authority" that issues enough money -- not too little and not too much.

The central banker said she does not see bitcoin becoming an important currency in terms of size or prevalence over the next decade, calling it a poor alternative.

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