Bitcoin, the largest cryptocurrency, endures its share of criticism. Some naysayers have gone so far as to say the digital currency is worthless or close to it. One important official from the Federal Reserve is not a big fan of digital currencies, either.
John Williams, currently head of the San Francisco Fed and widely expected to soon assume the same role at the New York Fed, is not enamored by bitcoin and other cryptocurrencies.
“The setup or institutional arrangement around bitcoin and other cryptocurrencies, first of all they have problems with fraud, problems with money laundering, terror financing. There’s a lot of problems there,” said Williams, according to CNBC.
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Williams added that cryptos do not “pass the basic test of what a currency should be.” Recently, the Bitcoin Dominance Index has been rising, confirming the dominant perch of the cryptocurrency. After bitcoin, the largest cryptocurrencies are Ethereum, Ripple, Bitcoin Cash and Litecoin.
Differing Opinions on Bitcoin
While Williams’ views on bitcoin are inline with those of many global central bankers, some other important names on the global monetary stage have differing opinions. For example, Christine Lagarde, the head of the International Monetary Fund (IMF), highlighted some of the benefits of bitcoin.
“Just as a few technologies that emerged from the dot-com era have transformed our lives, the crypto assets that survive could have a significant impact on how we save, invest and pay our bills,” said Lagarde in a blog post.
“As he has spent most of his career in central banking, Williams acknowledged he is “very biased” when it comes to the crypto issue. Williams likely will take the New York Fed reigns when current President William Dudley leaves in June,” according to CNBC.
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Some regulators have been critical of risks posed by cryptocurrencies with some countries moving to ban transactions in digital currencies and/or exchanges where digital currencies can be traded. Earlier this month, the Reserve Bank of India (RBI) said it is banning banks from dealing digital currencies and Chile recently banned some crypto exchanges.
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