To understand the future of crypto-currencies, follow the money supply.

Right now, bitcoin and other digital currencies are riding a wave of popular support, with little by way of caution from regulators. That will change, according to Jerome Booth, co-founder of Ashmore, the UK emerging markets investor with over $50 billion of assets under management, and our guest for OnFrontiers’ #ExpertChat this week.

In the past several years of quantitative easing – creating electronic money to buy government bonds and other financial assets to stimulate the economy – bitcoin has been helpful to the cause of encouraging spending, and so “of course central banks are very happy with crypto-currencies,” said Booth, author of Emerging Markets in an Upside Down World.

While in recent months the Federal Reserve has been gradually raising US interest rates, the real danger for users of digital currencies will come when the Fed shifts to a more aggressive tightening and the final axing of QE.

“Remember that just like the State has the monopoly on the legitimate use of force, so the central bank has the monopoly on the legitimate banning of all other currencies,” said Booth, who since Ashmore has created the New Sparta group of companies to invest in energy to high-growth technology, telecoms and media in emerging markets. “If they want to tighten, and at some point they will, I can easily see a scenario where bitcoin and others are simply banned.”