Tech News, Magazine & Review WordPress Theme 2017
  • FEATURES
    • News
    • Bitcoin
    • Ethereum
    • Ripple and XRP
    • Altcoins
    • Trading
    • Blockchain
    • Futuremash
    • Regulators
    • Scams
    • Crypto 101
  • HODLX
    • Latest Stories
    • FAQ
    • Submit Your Guest Blog
  • CRYPTO LIVEWIRE
    • Latest
    • Press Releases
    • Sponsored Posts
    • Submit Your Content
  • BEGINNERS
    • What Is Bitcoin?
    • What Is Blockchain?
    • What Does Hodl Mean?
    • How to Pay Your Bills with Bitcoin
    • Best Bitcoin FAQs
    • Example of Bitcoin’s Purpose
    • Cryptocurrency Has Multiple Meanings
    • Authenticator Alert – Securing Your Crypto
  • SUBMIT
    • Guest Blog
    • Press release
    • Sponsored post
  • EXPLORE
    • eToro
No Result
View All Result
  • FEATURES
    • News
    • Bitcoin
    • Ethereum
    • Ripple and XRP
    • Altcoins
    • Trading
    • Blockchain
    • Futuremash
    • Regulators
    • Scams
    • Crypto 101
  • HODLX
    • Latest Stories
    • FAQ
    • Submit Your Guest Blog
  • CRYPTO LIVEWIRE
    • Latest
    • Press Releases
    • Sponsored Posts
    • Submit Your Content
  • BEGINNERS
    • What Is Bitcoin?
    • What Is Blockchain?
    • What Does Hodl Mean?
    • How to Pay Your Bills with Bitcoin
    • Best Bitcoin FAQs
    • Example of Bitcoin’s Purpose
    • Cryptocurrency Has Multiple Meanings
    • Authenticator Alert – Securing Your Crypto
  • SUBMIT
    • Guest Blog
    • Press release
    • Sponsored post
  • EXPLORE
    • eToro
No Result
View All Result
The Daily Hodl
No Result
View All Result

Central Banker Slams Crypto, Calls Bitcoin, Ether and Tether ‘Fake Money’

by Daily Hodl Staff
November 5, 2018
in Bitcoin
‏‏‎ ‏‏‎ ‏‏‎ ‏‏‎
‎‎‎ ‏‏‎

To celebrate the 70th anniversary of the MBA program at the University of Miami Business School, guest Agustín Carstens addressed UM alum to deliver his take on the future of finance in a speech entitled “Money and payment systems in the digital age.”

Carstens, who is based in Basel, Switzerland, is the general manager of the Bank of International Settlements (BIS), an international financial institution owned by central banks to foster “international monetary and financial cooperation” and to serve as a bank for central banks.

A crypto critic, Carstens has previously denounced cryptocurrencies as failing dramatically to act as a means of payment, a unit of account and a store of value, and has implored young people to “stop trying to create money.”

Speaking before alumni of the Miami Business School, Carstens emphasized the evolution of money and tech.

“Many of you were born into a digital world. Some of you may have never known a world without the internet, without Google, without smartphones. Believe it or not, there was a time when libraries were the primary source of knowledge, information came from manual searches of books and microfiches, and computers took up the size of an entire classroom.

The situation is similar with money and payments: some of you may have never carried hundreds of dollars in cash to buy something, written a cheque at a grocery store, or searched for coins to make a call at a public telephone booth or feed a parking meter. A few of you who grew up outside the United States may have never even touched paper money until arriving here. Times are a-changin’, and changing quickly.”

But times are not changing in favor of cryptocurrencies, according to Carstens.

“Cryptocurrencies: fake money. No discussion of money and payments in the digital age would be complete without addressing cryptocurrencies. But are cryptocurrencies money? No. The use of ‘currencies’ is misleading. Cryptocurrencies, such as Bitcoin, Ether and Tether, do not serve the core functions of money. No cryptocurrency is a true unit of account or a payment instrument, and we have seen this year that they are a poor store of value. This then raises the question: what are they? Let me expand.

I am not aware of any major business that uses a cryptocurrency as its primary unit of account. Even overstock.com, one of the early Bitcoin evangelists, lists prices in a sovereign currency. It merely accepts bitcoins using a USD/bitcoin conversion rate that is valid for up to 10 minutes. That is even worse than my boyhood bus fare!”

On Bitcoin’s volatility

“The bitcoin equivalent of one US dollar at the beginning of the year, for example, would be the equivalent of about 50 cents today. Having a stable unit of account is fundamental to having a smoothly functioning economy; otherwise, we would be subject to daily, if not 10-minute, price changes. Some companies are trying to solve the volatility of cryptocurrencies by tying them to an underlying asset, such as the US dollar. However, even these so-called ‘stable coins’ also show volatility.”

Key reasons why crypto will fail

“First, the system is highly inefficient and expensive.”

“Second, take-up by consumers and retailers has been weak. There is a classic network problem. Consumers have not adopted cryptocurrencies because not enough retailers are accepting them, and retailers are not accepting them because not enough consumers use them. Interestingly, the few retailers that do accept cryptocurrencies are doing it more as a marketing gimmick than anything else.”

Crypto is like artwork

“So if cryptocurrency isn’t money, what is it? From my perspective, cryptocurrencies are, at best, an asset of some sort. Perhaps an asset comparable to a piece of art for those who appreciate cryptography. Buyers of cryptocurrencies are buying into nothing more than a software algorithm. Some firms are trying to back cryptocurrencies with an underlying asset, such as cash or securities. That sounds nice, but it’s the equivalent of making art from banknotes or stock certificates. The buyer is still buying an idea or a concept or, if you will, an asset that is the equivalent of art hanging on your wall. If people want the underlying asset, they might be better served just buying that. Others have argued that cryptocurrencies resemble assets because they are like ‘digital gold’, with just the right amount of scarcity – like the Aztec cocoa beans. However, that scarcity is artificially created through an algorithm and, as I said before, there is no scarcity with several thousand cryptocurrencies!”

Scammers, hacks and thievery

“Cryptocurrency enthusiasts often highlight the ability to avoid existing institutions. But is that a good thing? There’s not a day that goes by when there isn’t a story about stolen cryptocurrencies. One industry report suggests that almost $1 billion in cryptocurrencies have been stolen so far this year. Most of those who have suffered cryptocurrency theft can’t do much in terms of recovery (the local police is unlikely to be of much help!). Further, numerous studies have noted that a significant amount of Bitcoin activity is shady. One academic study suggests that about a quarter of Bitcoin users and about 46% of Bitcoin transactions are associated with illegal activity – whereas money and other assets held at regulated financial institutions are subject to rules on consumer protection, anti-money laundering and combating the financing of terrorism.”

The speech was part of a three-day forum convening academics and business leaders during UM’s homecoming and alumni weekend, which took place at the university from November 1-4.

You can read Carstens’s full speech here.

The Crypto Beat

From Bakkt to Bitcoin: 10 Signs Crypto Is Leading the Money Revolution 

Central Bank Regulator Pleads With Bitcoin and Crypto Community to Stop Challenging Status Quo

Top Influencers Proclaim the Death of Bitcoin and Crypto, Overlook the Power of Big Tech

Over 7,000 Global Bankers Arrive in Sydney for Sibos 2018: Swift, Ripple and the Financial Services Turning Point

Tom Lee to Central Bankers: Do You Like SWIFT Because It’s Backwards-Compatible With the Abacus?



Check Latest News Headlines


ADVERTISEMENT


Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any loses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.

Submit a Press Release

Crypto Livewire – Press Releases

  • Student Coin Found New Ways to Use Crypto
    February 24, 2021
  • Everest Receives Crypto Custodian Approval
    February 23, 2021
  • Here’s How Traders Are Staking Crypto Assets Without the Hassle
    February 18, 2021
  • 99Bitcoins Takes Over the Dead Coins Project to Become the Cryptocurrency Undertaker
    February 17, 2021
  • Coinsbee Makes Spending Bitcoin Easy
    February 17, 2021
Submit a Guest Post
ADVERTISEMENT
Bitcoin
$51,445.00
$51,445.00
3.8%
Ethereum
$1,649.19
$1,649.19
0.11%
Binance Coin
$258.17
$258.17
0.07%
Polkadot
$34.56
$34.56
1.52%
Cardano
$1.07
$1.07
3.77%
XRP
$0.473794
$0.473794
0.22%
ADVERTISEMENT

Spotlight

  • Here’s How To Find New Generation of 100x Altcoins, According to Crypto Trader Elliot Wainman
    February 20, 2021
  • This Low-Cap Altcoin Will Disrupt Gaming and Become Top Crypto Asset of 2021, According to Trader Ben Armstrong
    February 23, 2021
  • MicroStrategy Prepares To Purchase $1,030,000,000 in Bitcoin After Completing Debt Offering
    February 21, 2021
  • Ripple Lawyer Says Crypto Companies Engaged With SEC, Concluded They Could Support XRP
    February 25, 2021

DON’T MISS A BEAT

Crypto headlines delivered daily
to your inbox
BTC, ETH, XRP news alert options

By joining The Daily Hodl news list you agree to our
Terms and Conditions and Privacy Policy.

Check your inbox for confirmation email.

Cryptocurrency news and analysis, covering Bitcoin, Ethereum, Ripple, XRP, altcoins and blockchain technology

Categories

Bitcoin • Ethereum • Trading •
Ripple and XRP • Altcoins •
Blockchain • Regulators •
Scams • Crypto101 • HodlX • Explore • Futuremash •
Crypto Livewire

ABOUT US | EDITORIAL POLICY | PRIVACY POLICY
TERMS AND CONDITIONS | CONTACT

JOIN US ON TELEGRAM

JOIN US ON TWITTER

JOIN US ON FACEBOOK

COPYRIGHT © 2017-2021 THE DAILY HODL

No Result
View All Result
  • FEATURES
    • News
    • Bitcoin
    • Ethereum
    • Ripple and XRP
    • Altcoins
    • Trading
    • Blockchain
    • Futuremash
    • Regulators
    • Scams
    • Crypto 101
  • HODLX
    • Latest Stories
    • FAQ
    • Submit Your Guest Blog
  • CRYPTO LIVEWIRE
    • Latest
    • Press Releases
    • Sponsored Posts
    • Submit Your Content
  • BEGINNERS
    • What Is Bitcoin?
    • What Is Blockchain?
    • What Does Hodl Mean?
    • How to Pay Your Bills with Bitcoin
    • Best Bitcoin FAQs
    • Example of Bitcoin’s Purpose
    • Cryptocurrency Has Multiple Meanings
    • Authenticator Alert – Securing Your Crypto
  • SUBMIT
    • Guest Blog
    • Press release
    • Sponsored post
  • EXPLORE
    • eToro

© 2020 The Daily Hodl

×
We use cookies to give you the best online experience possible. Continue browsing if you are happy with that, or see how to manage cookies.