Augustin Carstens , the newly-christened general manager of the Bank for International Settlements (BIS) has recently slammed the cryptocurrency industry. During an interview with a Swiss German-language newspaper Basler Zeitung, Carstens was anything but kind in his comments about crytocurrencies. He labeled cryptocurrency as a “bubble” and made a public plea to the “young people” promoting it: “Stop trying to create money!” He faults virtual currencies as both an economic pursuit and a technological development. Carstens has earned the reputation for being one of the most vociferous critics of cryptocurrency.
As the interview session progressed, Carstens turned his focus on young people employing them to learn from the mistake of Isaac Newton; he noted that even though Newton was a renowned scientist, when he sought to create money out of nothing and exerted substantial efforts towards achieving that end, he never succeeded in realizing his dream.
Carstens further stated that he was “concerned by the pace of technological progress,” admonishing young people to devote their efforts to better pursuits, rather than an asset class that does “not fulfill any of the…purposes of money.” The BIS chief stated: “Young people should use their many talents and skills for innovation, not reinventing money,” he concluded. “It’s a fallacy to think money can be created from nothing.”
It may serve a greater good if one of Carstens’ translated responses is cited: He reportedly noted:
“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!”
Carstens also contended that central banks are “trusted” and that at least presently there is no viable substitute for the role they ably play in the world economy. “I can’t imagine something coming along any time soon that would be more efficient and generate the same level of trust,” he stated. It appears that “young people,” however, disagree.
It will be recalled that earlier this year he publicly spoke of bitcoin in derogatory terms; he opined that bitcoin is “a bubble, a Ponzi scheme, and an environmental disaster.” As far as referring to bitcoin as a “bubble”, his comments are at least in part in sync with comments that were widely attributed to Billionaire founder of Alibaba, Jack Ma, who was also reported to have referred to bitcoin as a ‘bubble’. Carstens obviously went beyond calling bitcoin a bubble to actually referring to it as fraudulent.
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