Bitcoin is a combination of a “bubble, a Ponzi scheme, and an environmental disaster,” according to the head of Bank for International Settlements (BIS).
The BIS is the umbrella organization of 60 member central banks, the represent around 95% of the world GDP.
BIS General Manager Augustin Cartens said, “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.”
Cartens delivered a speech at Goethe University on Tuesday. He talked about money and the role of central banks in the digital age.
According to him, central banks must prepare to protect consumers against the invasive spread of cryptocurrencies such as bitcoin. They must ensure cryptocurrencies do not become entrenched and pose a risk to financial stability.”
Cartens reminded central banks of their role as stewards of public trust. They should not forget it amid the dramatic rise of cryptocurrencies. “Private digital tokens masquerading as currencies must not subvert this trust,” he said.
Bitcoin has obvious flaws
In his speech, Cartens said cracks and cheating are appearing in the house of bitcoin. The cryptocurrency has “obvious flaws” because too many copycats are now available in the market. He noted that 19 digital currencies including bitcoin cash and bitcoin gold came out of the technology last year alone.
