General Manager of BIS Wants To Prevent Crypto From Joining ‘Main Financial System’
Augustín Carstens, the general manager of the Bank for International Settlements
(BIS), called Bitcoin a “combination of a bubble, a Ponzi scheme and an environmental disaster” and asked central banks to more closely regulate cryptocurrencies during a speech at Goethe University on Feb. 6. BIS is known as the “bank for central banks,” for it only provides banking services to central banks and other international organizations. In August 2017, when Carstens was the head of the central Bank of Mexico, he argued that Bitcoin is not a currency but a commodity and warned against its potential use for cybercrime.
Carsten’s recent comments Tuesday morning come after both the traditional and crypto markets have been experiencing a large drop since Monday, Feb. 5. Also this week, several large banks, including Lloyds Banking Group and J.P. Morgan Chase, banned credit card purchases of cryptocurrencies. In Carsten’s opinion, the global interest in cryptocurrencies is just a “speculative mania” and thus strict regulation by
central banks is needed:
“If authorities do not act pre-emptively, cryptocurrencies could become more interconnected with the main financial system and become a threat to financial stability.”
Carsten considers it “alarming” that some banks are releasing Bitcoin ATMs, for he considers Bitcoin’s potential use for illegal transactions too high to allow the currency to be associated with mainstream
financial institutions:
“If the only ‘business case’ is use for illicit or illegal transactions, central banks cannot allow such tokens to rely on much of the same institutional infrastructure that serves the overall financial system and freeload on the trust that it provides.”
The Foundation for the Defense of Democracies and Elliptic, a Bitcoin forensics company, released a report in late January that showed that less than one percent of all Bitcoin transactions represented money laundering.
Chuck Reynolds
Marketing Dept
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UAE Issues Warning On ICOs, Says Investors Should Assume Full Risk
A new document issued by the UAE Securities and Commodities
Authority (SCA) on Sunday, Feb. 4 warns investors about the risks of Initial Coin Offerings (ICOs). In the document, the SCA emphasizes that investors involved in ICO fundraising campaigns have to assume all associated risks, given that digital token-based fundraising activities are not regulated by the UAE, and no legal protection can be provided in cases of fraud.
The major risks, as pointed out by the SCA, include high volatility of ICO tokens on secondary markets, misleading or unaudited details in ICO offerings, as well as common unawareness of potential costs and gains shared by most retail investors. Moreover, the SCA mentioned the risks of investing in foreign ICOs, commenting that it may be difficult to verify the proper regulatory compliance of such fundraisers and track the invested money as it leaves the UAE.
This is the second time that the country’s government warns its citizens about the risks of ICOs as back in Oct. 2017, Abu Dhabi's Financial Services Regulatory Authority (FSRA) issued its guidelines on both ICOs and cryptocurrencies.
Chuck Reynolds
Marketing Dept
Contributor
Please click either Link to learn more about Bitcoin.
Interested or have Questions, Call Me, 559-474-4614
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