Bitcoin may be “crushed” and ultimately a risky investment, the Bank for International Settlements (BIS) said today.
The bank, which works as a bank for the central bank, also said that only central banks are allowed to issue digital currencies, according to a Bloomberg report today.
BIS General Manager Agustin Carstens was also quoted as saying in a speech to the Hoover Institute that Bitcoin became vulnerable to attacks as it approached its maximum supply of 21 million coins.
Carstens has criticized Bitcoin before. In 2018, he described it as “a combination of a bubble, a Ponzi scheme, and an environmental disaster.” Bloomberg also reports that Carstens says stablecoins are a hassle because private entities are responsible for backing the asset.
Central banks, by contrast, are in a much better place to work on digital currencies — and the BIS is researching the issue. “If digital currency is needed, the central bank should be the one to issue it,” he said.
Around the world, governments are seeking or piloting their own central bank digital currencies (CBDCs), which are essentially digital versions of governments’ fiat currencies. The Bahamas started rolling out CBDCs last year, while China is testing the digital yuan.