Contrary to what many crypto-enthusiasts think Bitcoin is a speculative investment with great upside potential, an old-age financial sector stakeholder has disregarded the value of digital assets and described them as pure software algorithms without any benefit.
Bitcoin is not money! – claims “Bank for Central Banks”
The ruling was issued by the Director-General of the Bank for International Settlements (BIS) Agustin Carstens to an audience in Miami on 1 November. The Mexican economist emphasized the reforms of the payment systems initiated by the central banks. In his view, these reforms are of more economic value than the attention paid to digital assets such as bitcoin.
“No cryptocurrency is a real account unit or a payment instrument, and we’ve seen this year that it’s a bad treasure trove. Buyers of cryptocurrencies buy nothing but a software algorithm.”
Carstens highlighted the strengths of bulk payments from a broader perspective and highlighted statistics on the value of card payments over a 16-year period.
“Worldwide, the value of card payments in 2016 reached 25 percent of GDP, compared with 13 percent in 2000, according to the Committee on Payments and Market Infrastructures. Already widespread mobile phone applications increase cashless payments.”
Carstens, former Governor of the Bank of Mexico from 2010 to 2017, also highlighted some efforts that central banks have made to bring the existing payment infrastructure to the forefront of innovation in the area of emerging blockchain.
“While this work is not as eye-catching as crypto, the development of new hardware, software and processes to secure your money, strengthen financial stability and protect the economy is of immense importance.”
In an interview with the Swiss newspaper “Basler Zeitung”, Carstens recently urged crypto-curious young people to “stop wanting to make money!” Focusing on a currency that “does not fulfill any of the purpose of the money”.
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Virtual currency is in many countries not legal tender, or is not backed by the government, and accounts and value balances are not subject to consumer protections. The information does not constitute investment advice or an offer to invest.
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