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Cryptos Won’t Work as Actual Currencies, UBS Economist Says

  • Supply can’t be reduced when demand falls, Donovan says
  • Many digital assets offer uncertain levels of spending power
Bitcoin Mining Comes to the Arctic Circle
Photographer: Andrey Rudakov/Bloomberg

Cryptocurrencies may never be able to work as actual currencies, according to UBS Global Wealth Management.

The “fundamental flaw” inherent in cryptocurrencies is that supply can’t be reduced when demand is slumping in most cases, Paul Donovan, chief economist at UBS GWM, said in a video this week. That means they can’t be considered currencies, he said.