Top ECB Official: Bitcoiners Don't Understand the Risks
A top European Central Bank (ECB) official, Yves Mersch, has said that many are unaware of Bitcoin's risks and that the cryptocurrency faces legal uncertainty.
His views were expressed in a speech at the Bundesbank conference. Bundesbank is the central bank of Germany, and as such is the most influential member of the European System of Central Banks (ESCB).
The ease of getting into the technology can mask its underling risks, he said:
"Although interested parties can very easily download the application for Bitcoin, they neither understand how this payment system works exactly, nor the risks they run when using it."
While Bitcoin does offer the advantage of avoiding exchange fees and like in cross-border Payments Payments One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl Read this Term, he argued that Bitcoin's Volatility Volatility In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders Read this Term can also contribute to unexpected exchange risk.
The absence of any regulation can entail losses of up to 100% of one's investment, as there's no insurance.
Euro banknotes are thus superior to Bitcoin, he argued, as their value is far more stable and their acceptance is compulsory.
He also discussed another form of alternative currency- money vouchers. They have been gaining popularity in China especially due to the country's tight financial controls. Even physical regional currencies, like Germany's Chiemgauer, are more suitable with over 700,000 units in circulation and its acceptance by over 900 companies and associations.
A top European Central Bank (ECB) official, Yves Mersch, has said that many are unaware of Bitcoin's risks and that the cryptocurrency faces legal uncertainty.
His views were expressed in a speech at the Bundesbank conference. Bundesbank is the central bank of Germany, and as such is the most influential member of the European System of Central Banks (ESCB).
The ease of getting into the technology can mask its underling risks, he said:
"Although interested parties can very easily download the application for Bitcoin, they neither understand how this payment system works exactly, nor the risks they run when using it."
While Bitcoin does offer the advantage of avoiding exchange fees and like in cross-border Payments Payments One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl Read this Term, he argued that Bitcoin's Volatility Volatility In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders Read this Term can also contribute to unexpected exchange risk.
The absence of any regulation can entail losses of up to 100% of one's investment, as there's no insurance.
Euro banknotes are thus superior to Bitcoin, he argued, as their value is far more stable and their acceptance is compulsory.
He also discussed another form of alternative currency- money vouchers. They have been gaining popularity in China especially due to the country's tight financial controls. Even physical regional currencies, like Germany's Chiemgauer, are more suitable with over 700,000 units in circulation and its acceptance by over 900 companies and associations.