As the virtual currency debate heats up, Agustin Carstens, president of the Bank for International Settlements (BIS), warned yesterday (24) that virtual currencies are often used to evade the law and should face more regulation.
He said many digital coins are being used for arbitrage or to deliberately avoid certain regulations, especially in many applications of certain cyber currencies that lack laws against money laundering and financial aid terrorism.
Bitcoin and other virtual currencies have seen huge growth in the last year as investors try to diversify their holdings during the Epidemic, and Bitcoin’s long position is seen as “digital Gold,” believing it can be used as an anti-inflationary tool during the economic crisis.
At the same Time, virtual currencies are notorious for their involvement in illegal activities, and the non-nominal nature of the currency makes it difficult to track criminal behavior. U.S. Treasury Secretary Yellen warned earlier in the year that the government needs to cut back on criminal transactions in virtual currencies.
He believes that virtual currency is often used as a “speculative tool”, but does not think it will pose a threat to the central bank and the financial system. He also said he doesn’t see any advantages to virtual currencies and said they have not yet made any progress as a form of trading, so he thinks the market needs to work on regulation to make these monetary instruments fit for purpose.
● Dalio: Bitcoin may be declared illegal by governments
The world’s largest hedge fund Bridgewater founder – Dalio (Ray Dalio) said the virtual currency bitcoin may be declared illegal by governments around the world. He pointed out that the U.S. government declared private gold collecting illegal in 1934, and now Bitcoin could also be declared illegal by countries because governments would not want Bitcoin to thin the exclusive status of state-issued currencies.
He also believes that all governments expect to have a monopoly on the money supply and do not want other investment products to share its unique status. Recently the Indian government is considering a policy of banning bitcoin, and if the government declares bitcoin illegal, it will cause demand for bitcoin to shrink significantly.
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