Fed Economists Say Bitcoin Can't Compete in World of Trust

Bitcoin and other cryptocurrencies solve the problem of making payments in an environment where trust is broken -- but it’s unclear whether that’s a dilemma that needs to be solved, Federal Reserve of New York economists wrote in a blog post.

Consumers trust institutions and the value of their currencies, at least in the U.S. and the rest of the developed world, so cryptocurrencies will have trouble competing with established payment methods like cash, checks, debit and credit cards, PayPal and others, wrote Antoine Martin, a senior vice president in the bank’s Research and Statistics Group.