Bitcoin, Crypto currency, Blockchain

“Bank of Central banks”: Bitcoin & crypto currencies are the established money system in place

The Bank for International settlements, also known as “Bank of Central banks” in its annual annual report for detailed comments on the topic of crypto-currencies. The Tenor is a little surprising. According to the BIZ are crypto-currencies, such as Bitcoin, as a currency suitable, and the established monetary system in all aspects.

The Bank for International settlements (BIS) is an international organization whose membership is reserved for Central banks or comparable institutions. One of the members of the American Federal Reserve, the people’s Bank of China, the Bank of Japan and the Deutsche Bundesbank. She is also the “Bank of Central banks”, since it manages the currency reserves of the member banks.

In its annual report, the BIS has now made very detailed submissions on the subject of crypto-currencies and can be of little good to you. In order to continue their previous position. Agustin Carstens, General Manager of the BIS, had Bitcoin already

a combination of a bubble, a Ponzi scheme and an environmental disaster

.

In the annual report it does not mean that crypto-currencies are scalable and, therefore, a collapse of confidence and the efficiency will succumb, the larger the number of users. Furthermore, in the report, in that it requires confidence in the stability of its value and in its ability to scale efficiently. This is the BIZ crypto-currencies (freely translated):

Due to the fragility of the decentralized consensus, the transactions are recorded, can be trusted to disappear at any time.

A breach of trust could, in the opinion of the BIS doubts as to the finality of individual payments will rise and would mean that a crypto currency can just stop, what leads to a complete loss of value. However, the monetary system would be in the established Fiat of a payment, as soon as it is confirmed by the books of the Central Bank, will be final and cannot be revoked.

In addition, the BIZ looks in the decentralized consensus is not a reliable System. In the view of the BIZ, it needs a Central Bank can determine the supply and the amount of Capital, to ensure the stability of the currency. In a decentralized network like Bitcoin, in contrast, there is no Central organization, which can stabilize the value of the currency. Due to the are Bitcoin and crypto-currency as a currency suitable.

Furthermore, crypto can be currencies, according to the BIZ is manipulated by miners, if the Miner control large amounts of computing power. On the topic of trust, crypto-currencies are inefficient and consume a lot of energy.

Central Bank Digital Currency (CBDC)

In the report it is stated that digital currencies issued by Central banks (CBDCs), is a subject. The BIZ had recognised the possibility of Central banks-issued digital currencies. Currently, this possibility of multiple Central banks will be investigated and tested, says the report.

According to BIZ CBDCs as cash might work, where the Central Bank issues a CBDC, and then banks and consumers to use the currency with no Central Bank involvement. The Nodes of the network would be determined by the Central Bank.

The realization that Central banks examine CBDCs, is not new. As we reported, said Jessel Lund of the company IBM, the development of a digital currency, a Central Bank is Ritten on the Blockchain by Stellar very far advanced, and the leeks, before standing in a timely manner.

In April, Antony Lewis from the R3 consortium explained that he believe that in the course of this year, Central banks-based digital currencies could be issued. The Bank of England published in may, a discussion paper in which it presents the three different models, such as a CBDC, and uses could be built.

He expected “definitely” a Central Bank of Digital Currency (CBDC), which will “soon” be published.

The regulation of crypto-currencies

According to the BIS there is a need for global Standards to regulate crypto-currencies. In particular, should be pursued as a result, the anti-money laundering and the financing of terrorism.

The extent to which certain crypto-currencies, in particular the anonymous crypto-currencies can work around to define Standards, according to the report controversial. In the case of anonymous crypto is currencies, it is difficult to determine whether they can be used to avoid taxes or to carry out illegal transactions.

In addition, the protection of investors needs to be improved in Initial Coin Offerings (ICOs), in order to counter the fraud, the report says.

A longer-term challenge to the stability of the financial system. Whether crypto-a system of currencies constitute a risk remains, according to the report to be seen.

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