General Manager of BIS Wants To Prevent Crypto From Joining ‘Main Financial System’

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The Bank for International Settlements (BIS) is not a fan of Bitcoin, this much can be surmised from the statements of general manager Augustin Carstens. For him, the Bitcoin is but “a combination of a bubble, a Ponzi scheme and an environmental disaster.”

For these reasons, central banks should look closely into it and regulate cryptocurrencies. He reiterated his advocacy for this move in a speech at the Goethe University. This rhetoric coming from Carstens is nothing new, as even back in August 2017, he had already been known to dismiss Bitcoin as being commodity and not currency. He also raised the issue of its vulnerability for use on cybercrime activities.

For him, all the hype surrounding cryptocurrencies is exactly just that—hype, or more specifically in his words, “speculative mania.” He furthered, “If authorities do not act pre-emptively, cryptocurrencies could become more interconnected with the main financial system and become a threat to financial security.”

As for the banks releasing Bitcoin ATMs, Carstens finds this move to be particularly alarming precisely because of its potential use for illegal transactions. “If the only ‘business case ‘is use for illicit or illegal transactions, central banks cannot allow such tokens to rely on much of the same institutional infrastructure that serves the overall financial system and freeload on the trust that it provides.”

The BIS caters exclusively to central banks and other international organizations, thereby earning its reputation as being the “bank for central banks.

 

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