After the announcement of The Central Bank of China’s last week, other banks from around the globe have released their thoughts on virtual currencies and especially on Bitcoin.
Central Banks and officials from Europe, the US, France and India have decided to give their statements and opinions on the digital currency and its place in their respective markets.
The Central Bank of China’s statement put a ban on financial institutions from handling the cryptocurrency, stating it difficult to regulate as a monetary equivalent. China did not deem Bitcoin illegal, and will allow its consumption to be a commodity, but not as a currency. Pricing, trading and exchanges from within the country will not be allowed. China is not the first country to impose a ban on Bitcoin. Although much more severe, Thai officials stated in July, that Bitcoin and related activities were illegal from there on, referring to it as a rival currency to the local baht.
On Thursday, after The Central Bank of China’s statement, other banks stated their concerns on Bitcoin. The Bank of France warned those who possess Bitcoins of the risks involved, including money-laundering and terrorist funding. Other concerns regarding those who invest in Bitcoin were also published. The concerns were mainly associated with the lack of security in the handling of the currency and the price “bubble”, warning French citizens who hoard Bitcoins of the possibility of financial and technical crashes that may occur, resulting in the demand of the currency to drop drastically.
Officials in India have also stated their concerns on Bitcoin, referring to it as an “e-Ponzi” scheme, and also focusing on the money-laundering capabilities.
“The concept of a digital currency, unregulated by any monetary authority, is a recipe for disaster. The Reserve Bank of India must step in and regulate this immediately. Lured by so-called appreciation in bitcoin value, people may invest in this and risk losing everything,” V. Rajendran, President of Cyber Society of India commented.
After the entire backlash Bitcoin received on Thursday, Bank of America came out with a report regarding the digital tender. Bank of America is the first Wall Street bank to express an opinion on Bitcoin, calling it a “major means of payment for Ecommerce.”
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The report went on to state that the monetary value of Bitcoin could reach $1,300 per BTC. Most experts at the time believed this to be a rather pessimistic forecast given the immense price jump in the last few weeks, eventually reaching over $1,000 per BTC before China’s statement on Thursday. Bank of America added that should the price surpasses $1,300, Bank of America stated that governments will have no choice but to regulate it.
Oddly enough we see a shift in points of view from what we have seen in the past. With US authorities confiscating Bitcoins and dubbing it the currency of choice for illegal activity, while Chinese companies fiercely invested in the currency, it would seem the tables have turned. A recent US Congress hearing coined Bitcoin as being able to “offer legitimate financial services”, followed by a further hearing to discuss the legitimate uses of digital currencies.
With all the negative statements on Bitcoin, we are left wondering what the US government has riding on the future of digital currencies, to take such a positive stance in comparison to China, India and France.
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