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2/6/2018, 1:05 PM (Source: TeleTrader)
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BIS's Carstens: Bitcoin is bubble, Ponzi scheme

Agustin Carstens, general manager of the Bank for International Settlements, said in a speech that cryptocurrencies "piggyback on the institutional infrastructure" and called on relevant authorities to prevent them to integrate even more and "become a threat to financial stability." Forks, of which there were 19 in Bitcoin alone last year, the lack of trustworthiness and inefficiency are "obvious flaws" of the most widely watched virtual coin, he added in remarks delivered on Tuesday in Frankfurt.

According to Carstens, who came to the helm of the so-called central bank of central banks in December, the distributed ledger is "very expensive to run and much less efficient" than solutions utilized in current monetary systems. "Novel technology is not the same as better technology or better economics. That is clearly the case with Bitcoin: while perhaps intended as an alternative payment system with no government involvement, it has become a combination of a bubble, a Ponzi scheme and an environmental disaster," he claimed.

Bitcoin was 6.11% lower at 1:02 pm CET, selling for $6,522.4. The exchange rate against the euro declined 6.89% to 5,160.19. February futures at CME Globex lost 7.72% to $6,570, while offshoot digital currency Bitcoin Cash plummeted 7.85% to $815.3.

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