BIS Chief Bashes Cryptos, Demands Young People "Stop Trying To Create Your Own Money"

Authored by William Suberg via CoinTelegraph.com,

The head of the Bank for International Settlements (BIS) continued the institution’s critical stance on cryptocurrency, saying it “cannot assume the functions of money,” BIS reports July 4.

image courtesy of CoinTelegraph

Speaking to Swiss newspaper Basler Zeitung last week, subsequently published by BIS itself, general manager Agustin Carstens cautioned “young people” against “trying to create money,” drawing comparisons to Bitcoin mining...

Glance back into the past and you will see that creating gold or money from nothing has been a regular obsession. It never worked. Even the great physicist Isaac Newton was at one point in his life obsessed by alchemy and the idea of making gold. He was very successful in a number of fields, but in this one he failed. Newton ended up as head of the British Mint. Why? Because he could detect at once if a coin was counterfeit. After he failed in his attempt to make gold, he switched sides and sent counterfeiters to prison.

So my message to young people would be: Stop trying to create money!

“Those who have the biggest incentive in the system of these so-called cryptocurrencies are those who produce the assets - the miners… This incentive, however, is not compatible with maximising the usefulness of money,” he told the publication.

Cryptocurrencies do not fulfil any of the three purposes of money. They are neither a good means of payment, nor a good unit of account, nor are they suitable as a store of value. They fail dramatically on each of these counts.”

The BIS had caused outrage when it published an article dealing with cryptocurrency in June, mainstream media widely reporting its highly suspicious outlook on the phenomenon versus fiat currency.

Along with identical concerns over its potential to function as “money,” the article also feared that mass adoption of cryptocurrency could “bring the internet to a halt” and other controversial claims.

"Cryptocurrencies are... a bubble, a Ponzi scheme and an environmental disaster."

Continuing the narrative, Carstens, who has himself come out as a cryptocurrency bear on multiple occasions, said it would unequivocally not have a “happy ending.”

“...No need to beat about the bush on that count. One mustn't forget that central banks have been providing electronic means of payment for decades,” he continued.

ZH: Carstens also reflected on his three biggest concerns:

First, that interest rates could rise too quickly. Not because of central banks, but as a reaction to market dynamics. This could considerably complicate the normalisation of monetary policy and ultimately threaten financial stability.

Second, I'm worried about the increasing protectionism in global trade. The entire dialogue on this issue is not constructive. One shouldn't forget that global trade is essential for global growth; the benefits it brings for the economy as a whole are undisputed. I fear that we could very soon end up in a lose-lose situation, as the protectionist measures on the table will be damaging first and foremost to export-oriented countries - above all, those that themselves impose no or only minimum tariffs. In a global economy based on the division of labour, however, they also affect suppliers or domestic producers that depend on the import of semi-finished products. And in the end it's always the consumer who has to pick up the tab, in the form of higher prices and less job security.

And third, I'm concerned by the pace of technological progress. In principle, it's a positive thing. But when innovation hurtles ahead, it can be destructive, for workers in particular. The challenge lies in using innovation to our advantage while containing the damage it causes. Here I'm thinking, for example, of the impact of information technology in finance - fintech - on, say, the business models and ultimately the stability of banks and other financial institutions. This is one of the topics we address in this year's Annual Economic Report. But the challenges involved are of course greater and concern the economy as a whole.

Judging by the level of animosity from Carstens, it seems clear that The BIS is very worried about the possible disruptive effects on their monopoly position from the cryptocurrency space.

Comments

hedgeless_horseman Cryptopithicus Homme Thu, 07/05/2018 - 17:10 Permalink

 

Fuck the bankers.

hedgeless_horseman's E-Z Internet Guide to Crypto Mining for Fun, Freedom, and Fungibility.

Second, if you have read The Creature from Jekyll Island - A Second Look at the Federal Reserve, Fifth Edition, and thus truly grok The Mandrake Mechanism, and how The Fed creates money out of nothing, then you should really enjoy disintermediating the Central Banks and creating crypto currency.

https://www.zerohedge.com/news/2018-03-07/hedgelesshorsemans-e-z-intern…

In reply to by Cryptopithicus Homme

metastar Bud Dry Thu, 07/05/2018 - 17:27 Permalink

Everyone knows that mere mortals can’t just create money. To do that you have to be a bank backed by the government big guns that force you to use it. The only other option to make the big money is to just steal it like a bank or government again backed by .... well you know..

 

Screw ‘em all! Bitcoin bitchez!

In reply to by Bud Dry

Old Skool King of Ruperts Land Fri, 07/06/2018 - 03:29 Permalink

Cryptocurrencies do not fulfil any of the three purposes of money. They are neither a good means of payment, nor a good unit of account, nor are they suitable as a store of value. They fail dramatically on each of these counts.

Interesting...going by his definition of what constitutes good money, it seems that no existing FIAT currency fulfils the purpose of money. Look at the USD, it's lost 98% of its value since 1913.

Typical MSM interviewer not pointing that out to him and then getting him to justify why Fiat currency is a good form of money.

In reply to by King of Ruperts Land

css1971 metastar Thu, 07/05/2018 - 17:47 Permalink

Banks act as trusted 3rd parties in transactions.

Well... Software (cryptography) can take that role. And... suddenly, banks are no longer required. Having been rendered obsolete. A bunch of lawyer jobs vanish too.

So far none of the cryptocurrencies are quite there yet, primarily scalabilty problems, but it's definitely doable and it'll definitely destroy banking when they get it right.

In reply to by metastar

hongdo css1971 Thu, 07/05/2018 - 18:42 Permalink

I played with Bitcoin and got out at the right time.  If the value would stay fairly constant, I would buy back in and use it as a currency.  I was pretty excited at first.  But between the loss of anonymity I experienced on Coinbase and at ATMs  and the volatility, I will wait.  If the bankers don't kill it, it will come back.

In reply to by css1971

lookslikecraptome doctor10 Thu, 07/05/2018 - 19:21 Permalink

The problem for the coins in regards to mass adoption, is people required for mass adoption listen to people like him.

Sure there are a bunch of people on reddit and hedge that understand that bankers are assholes, yet how many people in the US have even heard of hedge, reddit or coin telegraph etc. ??

And it does seem that the fomo patina has worn off cryptos.

https://www.recode.net/2018/4/24/17275202/bitcoin-scam-cryptocurrency-m… .

I may not agree with this article. But it, and hundreds of others like it, will scare off people.

In reply to by doctor10

DjangoCat lookslikecraptome Thu, 07/05/2018 - 20:19 Permalink

Checked out your profile.  Interesting, clearly a writer.  You other guys might want to have a look at what he has to say.  It will swell your heads.

"Fomo patina", patina being a crust, or colouring built up over many years.., well, the Bitcoin thing has been going on 8 years.  That's a very short period in the life of an historic transitional phenomenon.  Patina is hardly a term I would use in this reference.

I believe you are wrong.  This article confirms the conspiracy theory that the BIS and the Central Banks control the world, and that crypto is rocking the very foundations of ((their)) power.   They warn you against it, they block it's adoption by freezing the crypto/fiat trading pair, they come up with stories like this one, and, worst of all, you may not agree, but you believe it will scare people off.

Lets find a pair, there lad. 

In reply to by lookslikecraptome

lookslikecraptome DjangoCat Thu, 07/05/2018 - 21:12 Permalink

Let me make this process of mass adoption and some of its problems clear. This list is from drudge report. Do feel free to click through and see how many articles you can find about coin in the last month. The only one I found, and, it may not be the only one, is on Breitbart, and it had only 15 comments or so.

In regards to the issues of mass adoption, you have to think in terms of market demographic and psychographics, public relations and peoples tolerance for risk. I have a tolerance for risk. I trade indices daily and am never in overnight. A GREAT DEAL of middle America does not have the tolerance for trading on instruments they have heard something about. I get hedgers, redditors and others get it.

ABCNEWS
ADWEEK
ATLANTIC
AXIOS
BBC
BILD
BILLBOARD
BLAZE
BOSTON GLOBE
BOSTON HERALD
BREITBART
BUSINESS INSIDER
BUZZFEED
CBS NEWS
CBS NEWS LOCAL
CELEBRITY SERVICE
C-SPAN
CHICAGO SUN-TIMES
CHICAGO TRIB
CHRISTIAN SCIENCE
CNBC
CNN
DAILY BEAST
DAILY CALLER
DEADLINE HOLLYWOOD
DER SPIEGEL
E!
ECONOMIST
ENT WEEKLY
FINANCIAL TIMES
FORBES
FOXNEWS
FRANCE 24
FREE BEACON
FREE REPUBLIC
HOT AIR
HELLO!
HILL
HILL: JUST IN
H'WOOD REPORTER
HUFFINGTON POST
INFOWARS
INTERCEPT
JERUSALEM POST
LA DAILY NEWS
LA TIMES
LIFEZETTE
LUCIANNE.COM
MEDIAITE
MOTHER JONES
NATION
NATIONAL REVIEW
NBC NEWS
NEW REPUBLIC
NEW YORK
NY DAILY NEWS
NY OBSERVER
NY POST
NY TIMES
NY TIMES WIRE
NEW YORKER
NEWSBUSTERS
NEWSMAX
PEOPLE
PJ MEDIA
POLITICO
RADAR
REAL CLEAR POLITICS
REASON
ROLL CALL
ROLLING STONE
SALON
SAN FRAN CHRON
SKY NEWS
SLATE
SMOKING GUN
TALKING POINTS MEMO
TIME MAG
TMZ
[UK] DAILY MAIL
[UK] DAILY MAIL FEED
[UK] DAILY MIRROR
[UK] DAILY RECORD
[UK] EVENING STANDARD
[UK] EXPRESS
[UK] GUARDIAN
[UK] INDEPENDENT
[UK] SUN
[UK] TELEGRAPH
US NEWS
USA TODAY
VANITY FAIR
VARIETY
WALL STREET JOURNAL
WASH EXAMINER
WASH POST
WASH TIMES
WEEKLY STANDARD
WORLD NET DAILY
ZERO HEDGE

 

u will note that reddit and coin telegraph etc etc r not listed. there was and article on WSJ not favorable to coin, some on forbes.

Yo Django. Let me know when you trade the SP, Nikkei, minis and stuff. I have my pair. Do you?

In reply to by DjangoCat

null egerman Thu, 07/05/2018 - 23:00 Permalink

Like they could not or do not already control it if it was worth controlling. And if they do, since the float is basically petty cash for them, why he gotta give nervous interviews?

Don’t be jealous ... that’s why they own you, metaphorically speaking.

In reply to by egerman