Tuesday, April 13, 2021

The general manager of BIS says cryptocurrencies need more regulation.

The Takeaway:

According to the Bank for International Settlements (BIS) general manager, cryptocurrencies are used to evade laws, and they should face more regulation.

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Cryptocurrencies are used to evade laws and should face more regulation, according to the general manager of the Bank for International Settlements (BIS). Many digital coins are “used to do some arbitrage, or to circumvent some regulations,” Agustin Carstens said in an interview with CNBC. He added that laws against money laundering and the financing of terrorism were “absent in many applications of some cyber currencies.”

 

“Cryptocurrencies are being used as a “speculative vehicle.”

Bitcoin and other virtual currencies have seen huge gains over the last year, as investors have looked to diversify their holdings in the coronavirus pandemic. Bitcoin bulls view the token as a sort of “digital gold,” claiming it can act as an inflation hedge in times of economic crisis and massive stimulus. Cryptocurrencies like bitcoin are known for being highly volatile. Carstens said he thinks cryptocurrencies are being used as a “speculative vehicle” and doesn’t see them as a threat to central banks and the established financial system. “I don’t see any dominance of cyber currencies,” he said, adding cryptocurrencies haven’t made “any inroads in terms of working as money.”

 

Central banks around the world are exploring CBDC. 

“Stablecoins also have some limited applications,” BIS general manager said, referring to digital coins that are tied to external assets like the U.S. dollar to minimize price volatility. “They have their own role for very specific purposes. Therefore, I don’t see any challenge from them to sovereign money.” His comments come when various central banks across countries are exploring their own digital currencies. China has led the pack, trialing its digital yuan in a number of cities, while Sweden’s central bank is also considering whether to introduce a digital version of its krona currency as cash usage declines rapidly in the Scandinavian country.

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Disclaimer: The article reflects the opinions of the author and is not representative of Chaintimes’ views.
The article does not offer any investment advice. User discretion is advised when investing in or trading with cryptocurrency. Extensive and diligent research should be carried out by the reader before making a decision.

Jai Pratap
Jai Pratap
A Mass Media Graduate who loves to write. Jai is also a sports enthusiast and a big movie buff. He loves to learn new things.

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