BIS Chief Calls for End to Minting Cryptocurrencies

BIS Chief Calls for End to Minting Cryptocurrencies

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July 5, 2018 by Ian Moore
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  Head of the Bank of International Settlements, Agustín Carstens, has called for an end to the production of cryptocurrencies. According to the Chief, cryptocurrencies represent “a bubble, a Ponzi scheme, and an environmental disaster.” The BIS chief made these comments during a recent interview with Basel-based media outlet Baler Zeitung. When asked about his
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Head of the Bank of International Settlements, Agustín Carstens, has called for an end to the production of cryptocurrencies. According to the Chief, cryptocurrencies represent “a bubble, a Ponzi scheme, and an environmental disaster.”

The BIS chief made these comments during a recent interview with Basel-based media outlet Baler Zeitung. When asked about his views on the financial impact of cryptocurrency on the young generation, Carstens asserted that cryptocurrencies don’t have the core features to be classified as a currency. As such, the BIS head contended that the activities associated with cryptocurrency represent an effort to create money out of nothing.

“Young people should use their many talents and skills for innovation, not reinventing money. It’s a fallacy to think money can be created from nothing,” Carstens said, adding:

“Glance back into the past and you will see that creating gold or money from nothing has been a regular obsession. It never worked. … So my message to young people would be: Stop trying to create money!”

Since his appointment as general manager of the BIS in December 2017, Carstens has stuck to his negative stance on cryptocurrencies.

Earlier this year, Carstens warned that cryptocurrencies could become “parasites” on the financial system and argued that they must be held to the same standards as other banking and payment services. The volatility of cryptocurrencies, the BIS chief went on, is tolerated mostly by those “who massively evade taxes or launder money.”

Most recently, the BIS issued part of its annual economic report suggesting that cryptocurrencies cannot replace the current payment system.

In the 24-page article released on June 17, the BIS said Bitcoin and other cryptocurrencies suffered from “a range of shortcomings” that would prevent them from ever fulfilling the lofty expectations of developers and investors alike.

 


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