UBS Chairman believes Bitcoin is only a transaction currency

UBS Chairman and former Bundesbank President Axel Weber said on Wednesday bitcoin does not fulfill some of the most important functions of currency, the latest senior banker to express skepticism about the cryptocurrency.

"I get often asked why I'm so skeptical about bitcoin, it probably comes from my background as a central banker," Weber said at a conference organized by the Swiss Finance Institute. Axel Weber previously served as head of the Bundesbank, Germany's central bank.

"The important function of a currency is, it's a means of payment, it has to be generally accepted, it has to be a store of value and it's a transaction currency. Bitcoin is only a transaction currency."

Weber's comments follow JPMorgan Chase & Co. Chief Executive Jamie Dimon last month saying bitcoin "is a fraud" and will blow up.

Bitcoin is a digital currency that enables individuals to transfer value to each other and pay for goods and services bypassing banks and the mainstream financial system.

While banks have largely steered clear of bitcoin since it emerged following the financial crisis, the virtual currency has a range of supporters, including technology enthusiasts, libertarians skeptical of government monetary policy and speculators attracted by its price swings.

Weber reportedly criticized the cryptocurrency market back in late 2015, according to a report at the time from City A.M. He is said to have remarked that the bitcoin model is set to fail "because there is no lender of last resort – there will always be boom and bust."

The UBS chairman becomes the latest figure from a major financial institution to weigh in on the topic of cryptocurrencies. On Tuesdya, Lloyd Blankfein, the CEO of Wall Street investment bank Goldman Sachs, took to Twitter to offer an open perspective on bitcoin.