The BIS chief emphasized that such duplication dilute value to the extent that cryptocurrencies have no economic value. In addition, Cartens pointed out bitcoin is a payment system because of its high volatility. Currently, the digital currency is not functional as a form or payment.
He thinks the fascination with cryptocurrencies seems to have more to do with speculative mania than its use as electronic payment. Furthermore, the BIS chief told central banks that cryptocurrencies are unsafe because of the following reasons:
- large price swings,
- high transaction cost
- lack of consumer and investor protection
Cryptocurrencies are also not suited to fill the role of money as a shared means of payment, store of value, and unit of account.
Moreover, Cartens said there is a “strong case for policy intervention.” Authorities must ensure that people do not use cryptocurrencies to evade taxes, launder money, or finance criminal activities. They must ensure that criminals do not use technological advances to legitimize profits from illegal activities.
A growing list of bitcoin critics
The BIS chief joins the growing list of influential individuals critical of bitcoin and other cryptocurrencies. Renowned economist Nouriel Roubini called bitcoin the “biggest bubble in human history” and predicted that its value will collapse to zero.
