Cathie Wood says central banks could add crypto to their balance sheets. Here is the list of bitcoin skeptical central bankers who think otherwise. | Currency News | Financial and business news
Superstar investor Cathie Wood said on Thursday that central banks in emerging markets may add cryptocurrencies to their balance sheets to hedge against the effects of deflation as the economic boom cools.
It said at CoinDesk’s Consensus event that emerging market central banks – and perhaps even the euro zone – may well start holding hard assets like bitcoin “because they know their currencies are going down and will be under attack as reserves go down “.
Yet central bankers have generally looked down on crypto, including those in emerging economies such as India.
Hours before Wood’s comments, the head of Japan’s central bank expressed doubts about bitcoin’s uses and called the asset “speculative.”
“Most of the trading is speculative and the volatility is extraordinarily high,” said Haruhiko Kuroda, governor of the Bank of Japan. says Bloomberg Thursday. “It’s hardly used as a means of payment.”
Here’s what other central bankers think about cryptocurrencies:
The Governor of the Reserve Bank of India, Shaktikanta Das
Das said in february he feared that cryptocurrencies might threaten financial stability in India.
He told CNBC TV-18 that the central bank had communicated these “major concerns” to the government.
India’s central bank decided to ban banks from handling cryptocurrency transactions, although the Supreme Court later overturned the rule in March. Asia’s third-largest economy has considered banning cryptocurrencies altogether.
The Governor of the People’s Bank of China, Li Bo
Li said in April that bitcoin is an “investment alternative,” which encouraged many in the crypto community.
“We view bitcoin and stablecoin as crypto assets… They are investment alternatives,” he said during a panel hosted by CNBC. Still, he said they “are not a currency per se” and added that he had doubts about their role in the real economy.
However, the PBoC has a habit of acting harshly against crypto. He renewed its repression on banks accepting cryptocurrencies as payments in May, triggering a drop in bitcoin.
Central Bank of Argentina
Argentina’s central bank – which is a country prone to currency crises – warned its citizens earlier in May about the risks of cryptocurrencies, in a joint statement with the securities regulator.
He said crypto assets are not legal tender and “can lead to significant financial losses for its holders, including the possibility of losing all of the resources invested.”
Governor of the Bank of England Andrew Bailey
Bailey cautioned against cryptocurrencies during the BoE’s latest monetary policy meeting. “I would only emphasize what I have said several times in recent years. I am afraid they have no intrinsic value,” he said.
“Now, that doesn’t mean people don’t value them, because they may have extrinsic value. But they don’t have any intrinsic value.”
Bailey added: “I’m sorry, I’ll say it quite frankly: only buy them if you’re willing to waste all your money.”
The governor later said in May that the rise in bitcoin was a warning sign. “You’ve probably seen all the stories about the price of bitcoin,” he said at a Bank of England event.
“It’s a warning sign. People are looking for investment opportunities. Buy it if you want, but it has no intrinsic value.”
Federal Reserve Chairman Jerome Powell
Powell made a similar point to Kuroda in April, saying bitcoin and cryptocurrencies are meant for speculation.
“They are really vectors of speculation,” he told the Economic Club of New York. “They are not really actively used as payments.”
In March, he compared cryptocurrencies to gold. “These are very volatile stores of value and therefore not really useful and they are not backed by anything,” Powell said at a Bank for International Settlements event.
“It’s more of a speculative asset that is essentially a substitute for gold, rather than the dollar.”
The President of the European Central Bank Christine Lagarde
The guard mentionned she doesn’t think bitcoin is a real currency – a view shared by most central bankers – in February, adding that central banks wouldn’t start holding cryptocurrencies.
“It’s highly unlikely – I’d say it’s out of the question,” Lagarde said at a virtual event hosted by The Economist.
It was even more negative in January, saying that bitcoin “is a highly speculative asset, which has carried out interesting and totally reprehensible amusing deals and money laundering activities.”
The boss of the ECB called for more regulations which “must be applied and accepted … at the global level”.
Vice-President of the ECB Luis de Guindos
Lagarde’s deputy expressed similar skepticism about cryptocurrencies in May, saying bitcoin is not a real investment.
“When you have a hard time figuring out what the real fundamentals of an investment are, then what you are doing is not a real investment,” Guindos said. told Bloomberg TV. “It is an asset with very weak fundamentals and which will be subject to a lot of volatility.”
However, the ECB said in its Financial Stability Review in May that bitcoin does not pose much risk to the financial system.
Danmarks Nationalbank Governor Lars Rohde
Rohde stuck to the central banker’s line on Thursday, tell bloomberg that bitcoin is “at best a highly speculative asset”.
He said: “There is no stability and no guarantee whatsoever on the value of cryptocurrencies.” Rohde added that he was “tempted to ignore” cryptos.