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Bank of International Affairs GM expresses his reservations for the Cryptos

Feb 07, 2018 Posted /  3519 Views

Bank of International Affairs GM expresses his reservations for the Cryptos

In his speech he suggested to central banks, Financial market regulators, Tax offices and finance ministries that they should regulate the newly emerged digital economy to safeguard the value of real money. The volatility got highlighted when the value of number one cryptocurrency, Bitcoins soared upwards in mid of December to $20,000 USD followed by 8% fall. The lowest value recorded after peak point is $6232.44 USD.

Although Bitcoin came up with the purpose to serve as a mode of payment. But as Carstens said it is not functioning as it was supposed to. He further added that if the tokens are used for illicit transactions by Financial Institutes then central banks should not allow such tokens to stay in the market and disrupt the entire Financial system.

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Carstens is one of those officials who is showing reservation towards the circulation of virtual tokens. Although he believes that the technology behind cryptocurrencies has the ability to reshape global economy but also concerned about digital coins volatile nature and its characteristics appealing to criminals motives.

Talking about European Central Bank, sources state that the President of ECB, Mario Draghi considers cryptos as “Very Risky” assets that need to be kept under supervision.
In last World Economic Forum conducted in Davos, An ECB executive board member Benoit Coeure recommended to a group of 20 countries to frame regulations for circulation of cryptocurrencies in the next meeting that would take place in the month of March.

Yves Mersch, an ECB policy maker will take a lecture on Thursday in London where he will discuss Virtual currency and the technology behind it.

The crypto developing organizations state that the number of virtual tokens in existence is fixed and because of this feature they believe that cryptos will manage to survive dilution by apex financial institutes. Although Carstens is of the view that proliferation in the number of these tokens can take place by few amendments.

Further, in his public statement, Carsten warned that if an action is not taken regarding the circulation of cryptos then it will get even more involved with the Financial system. Central banks play an important role in guiding an economy towards the right direction and hence become trustworthy with time. Involvement of decentralized virtual currency can result in debase of this trust.

Applancer is an open platform for discussion on all things like Blockchain , Cryptocurrency and Ico news updates. As such, the opinions expressed in this article are the author's own and do not necessarily reflect the view of Applancer .

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Tags: Financial system digital coins Tokens virtual tokens

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