An advisor to China’s central bank, Sheng Songcheng, said that virtual currencies like bitcoin are assets but do not have the fundamental attributes needed to be a currency that could meet modern economic development needs. Speaking in an interview with financial magazine Yicai, the PBOC advisors said that the adoption of Bitcoin as a national currency by a country “could lead to its economic collapse.”

Sheng Songcheng, a counselor at the PBoC, dismissed digital currencies like bitcoin as assets that lack the value basis of a legitimate currency. “Bitcoin does not have the fundamental attributes needed to be a currency as it is a string of code generated by complex algorithms, and does not have inherent value… But I do not deny that virtual currencies have technical value and are a type of asset,” he said cited by Reuters. Apparently he is unaware that paper currencies – the type preferred by central bankers – is made of either strings of linen and paper or strings of 1s and 0s, and – while also having no inherent value – can be infinitely created out of thin air.

Sheng, who was the director-general of the Department of Statistics and Research at the People’s Bank of China, holds a PhD in economics from the Shanghai University of Finance and Economics in the 90s. He is currently the professor of economics and finance at a business school in Shanghai.

Sheng warned that the deflationary nature of digital currencies – unlike fiat money there is a hard limit on how much can be created – would mean that they would not function well as a currency or medium of exchange in modern economies. Expanding on his criticism, by Reutersthat “Bitcoin would reach its ceiling of 21 million in 2140. If it is accepted as standard money, that will inevitably lead to deflation and constrain economic growth.” Of course, that same feature would assure that consumers’ purchasing power does not vaporize every time central bankers make a mistake and unleash hyperinflation.