Bank of International Settlements Call For Preemptive Strike on Cryptos

Updated On Feb 7, 2018 by Cameron Bishop

Agustín CarstensAgustín Carstens, the General Manager of the Bank for International Settlements, has urged central banks across the world to act against crypto currency. Carstens believes crypto currency is a “Threat to Financial Stability.” While giving a lecture in Frankfurt, at an event was organized by a research centre called Sustainable Architecture for Finance in Europe, the BIS official stated that

“authorities must be prepared to act against the invasive spread of crypto currencies to protect consumers and investors.”

Carstens began by defining what is money and why a token released by a block chain network cannot be a dependable form of currency. According to him, a currency which is not backed by a major institution is not dependable and certain to fail. He tried to convey that crypto currencies is a form of private money, which can never work in the interest of common people, and a central bank is essential for financial stability.

Further, Carsten argued that forking a block chain network is equivalent to the devaluation of a fiat currency. He pointed out Bitcoin as an example to his statement. Carsten opined that in the case of a crypto currency no institution is liable, and “concentration of their ownership, could make them even less trustworthy.” Finally Carsten also pointed out that crypto currency is not energy efficient. He said crypto currency is a “a crazy way to store value. DLT-based systems are very expensive to run and slower and much less efficient to operate than conventional payment and settlement systems.”

While calling crypto currencies a bubble and a Ponzi scheme, Carsten referred banks as “stewards of public trust.” However, people who know about 2008 financial crisis would certainly have a different opinion about banks.

Cameron works tirelessly behind the scenes ensuring his many US news stories are factual, informative and brought to you in a timely fashion before most other media outlets have them. He is an investigative journalist at heart who also has a fond interest in the money and business markets too.

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