Agustin Carstens, the director general of the Bank for International Settlements (BIS), today expressed his hostility towards cryptocurrencies. He believes that governments, if they wish to protect the financial system, must take stronger measures to contain the expansion of this ecosystem.
Bitcoin, a threat to the financial system
4000 billion dollars. This is the decline in the valuation of the stock market, recorded over the last 8 days - a fall that has prompted many investors to turn to gold and other safe havens, in an attempt to limit their losses.
It is in this context that Agustin Carstens - the Managing Director of the Bank for International Settlements (BIS), nicknamed "the Bank of Central Banks" - today held a speech at the German University House of Finance , located in Frankfurt.
Bitcoin and central banks But Carstens did not go there to talk about "traditional" finance, and discuss equity market developments - his presentation was mainly focused on a topic: the answer to cryptocurrency expansion .
Through his presentation , entitled " Money in the digital world: what role for central banks? "He took a hard bite of Bitcoin and other digital assets. These would constitute innovations not interesting from a technological point of view, but also unreliable payment systems .
"It is not because a technology is new that it is a better technology, or a technology that can benefit from better economic fundamentals.
This is clearly the case for Bitcoin: while it has undoubtedly been designed to offer an alternative payment system, which can overcome the presence of a government, the asset has become the mix of a bubble, a Ponzi scheme and an environmental disaster. "
And despite these strong criticisms, it is impossible to trace any argumentation that could justify the use of these three qualifiers .
But this is probably not the most important for Mr. Carstens. The leader seems to want above all to discredit the crypto-currencies , whose expansion allows to offer an alternative - that some believe credible - to the currency fiduciary. An expansion that could, in the coming years, erode the power of central banks on the economy - while they hold the monopoly of monetary issuance.
" Private digital tokens who pretend to be currencies should not turn around the confidence [in central banks], " he added, before urging banking regulators to put pressure on this ecosystem.
"Political intervention is needed"
Mr Carstens believes that " the authorities are starting to intervene more and more to limit the risks associated with cryptocurrencies ".
But he would like them to go even further. " Everything suggests that political intervention is needed, " he added - an intervention that would be able to " protect payment systems " today.
He hopes to prevent cryptocurrencies from accessing financial infrastructures . It also explains that Bitcoin "is not functional as a means of payment ", and seems to imply that the asset would be used mainly to finance illegal acts :
"If the only case of use of Bitcoin is related to illegal or illegal transactions, then central banks can not allow such tokens to rely on the same institutional infrastructure that is used in the financial system, and 'so grab the trust it offers."
He added that commercial banks are at the forefront , especially because they act as intermediaries for customers of cryptocurrency trading platforms. He believes that the authorities must ensure that these financial institutions " do not promote dishonest behavior ".
" Financial authorities may also have to intervene to ensure financial stability, " he said. The leader believes that " if the authorities [did not intervene] as a precautionary measure," then digital assets could " pose a threat to financial stability ".
Congratulations @xexylol! You received a personal award!
You can view your badges on your Steem Board and compare to others on the Steem Ranking
Do not miss the last post from @steemitboard:
Vote for @Steemitboard as a witness to get one more award and increased upvotes!
Congratulations @xexylol! You received a personal award!
Click here to view your Board