Bitcoin as a threat of financial stability

Łukasz Mirytiuk
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World’s top cryptocurrency was created more than 8 years ago, with market value around 16000$ now – Bitcoin can be seen as a threat to financial stability.

“While these digital currencies may not pose major concerns at this current level of use, more serious financial stability issues may result if they achieve wide-scale usage.” – FED Vice-chairman Randal Quarles said.

Cryptocurrencies like Bitcoin are not being seen as a threat right now, but it’s possible that it will change in a while.

Although Turkey government believes that Bitcoin can stabilize their financial situation. With current legal situation you can use cryptocurrencies to buy house in Ankara.  We can assume that their economy will grow with investors’ “Bitcoin money”.

Great Britain also sees no concern in digital currencies. Head of the Bank of England, and chairman of G20 Financial stability board Mark Carney, talking to British lawmakers in Parliament, has said:

“At present, we don’t view Bitcoin as a financial stability issue.”

Later added that he is interested in DLT, and that central banks own FinTech accelerator, shows that there’s future in DLT. From report Bloomberg shows BoE is interested in DLT, but they will not hurry with changing core of their banking system.

On the other hand, Danish central bank warns investors to not put their money on cryptocurrencies.

“I see bitcoin like tulip mania, like a bubble out of control.”-  Danmarks Nationalbank director Lars Rohde said, argued that bitcoin is as dangerous as casinos.

“If you do not like casinos, you’ve got a good alternative.” he said.

In his point of view, bitcoin market is unregulated, ergo there is no protection [for investor] from authorities.

We can assume that right now there’s no reason to think that cryptocurrencies can pose a threat, but it’s needed to look closer to that fast growing subject.

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