As more retail investors leap into bitcoin, UBS' chairman is calling regulators to action to temper the effects of the cryptocurrency's uncontrollable surge.
Bitcoin, the world's best-known cryptocurrency, is testing the $20,000 mark, after starting the year around $1,000. The unprecedented surge, largely fuelled by Asian demand, has UBS chairman Axel Weber worried. The former longstanding Bundesbanker warned of a crash in the currency, in an interview with Swiss weekly «NZZ am Sonntag» (in German, story behind paywall).
The risks of bitcoin are due to a design failure which foments huge price differentials – in either direction, Weber argued. «As a bank, we have consciously warned against investing in this product because it doesn't hold any intrinsic value and we don't view it as sustainable.»
Because retail investors are increasingly getting into bitcoin, Weber is calling financial regulators to action in order to cushion the effects of the huge price swings. «I would welcome an discussion with regulators about cryptocurrencies,» Weber said.
«Personal Decision»
Weber also responds to the very sudden departure of UBS' private banking head Juerg Zeltner this week, after more than 30 years with the bank. «He expressed the wish to leave the bank after 30 very successful years. This was his personal decision.»
His successor is Martin Blessing, the former Commerzbank boss who moved to the Swiss bank last year as its head of Switzerland. Weber was mum on whether Blessing is in pole position to inherit the CEO job from Sergio Ermotti, as many observers including finews.asia have noted. «We'll cross that bridge when we come to it.»
Weber also sees the debate over UBS' headquarters as ended. Ermotti had issued a veiled threat several weeks ago, saying there is no airtight guarantee that UBS will remain in Switzerland. «Sergio and I have always highlighted the importance of the bank's Swissness. We see the Swiss location as advantage.»
