BIS Chief Advises Central Banks Against Issuing Their Own Cryptocurrencies

Augustin Carstens, the head of the Bank of International Settlements (BIS), has recently argued central banks throughout the world shouldn’t issue their own cryptocurrencies, as these could have “huge operational consequences” and “implications for the stability of the financial system.”

According to news outlet CityAM, Carstens’ words came during a speech at the Central Bank of Ireland, in which he pointed out he believes central bank digital currencies (CBDC) are going to have consequences “for central banks in implementing monetary policy and implications for the stability of the financial system.”

He noted that traditionally, central banks ensure “inflation is under control, the economy runs smoothly and the financial system is sound.” This, while commercial banks “thrive by attracting and serving customers.”

Central bank digital currencies, Carstens said, would “change the demand for base money and its composition in unpredictable ways.” He added:

Central banks do not put a brake on innovations just for the sake of it. But neither should they speed ahead disregarding all traffic condition

Notably, his words come shortly after J.P. Morgan Chase, the largest US bank and the world’s sixth largest bank, revealed it’s launching its own cryptocurrency, the JPM Coin, which is set to be used for instant payment settlements for clients.

Jamie Dimon, J.P. Morgan’s CEO, was a notable bitcoin critic back in 2017, when the flagship cryptocurrency’s price was rising to its near $20,000 all-time high. As time went by he started distancing himself from it, presumably as the financial institution focused on its own crypto.

JPM Coin has, however, been under fire as economists, cryptocurrency miners, investment managers, crypto pioneers, and advocates have criticized the stablecoin. Dimon has, however, hinted the coin could eventually be used by consumers.

Carstens himself has in the past criticized cryptocurrencies, as he advised crypto enthusiasts to “stop trying to create money.” Per his words, enthusiasts would be better off pursuing other things with their talents, as creating money has been a historical obsession that never really worked.

Finnish Customs Controls $15 Million in Seized Cryptocurrency

Michael LaVere
  • Finnish customs controls more than €15 million in bitcoin in addition to millions of other crypto assets.
  • Authorities are unsure of the best way to offload the seized assets without contributing to criminal behavior. 

A Finnish customs official has revealed that the agency is currently in possession of millions of euros in seized cryptoassets. 

According to a report by local news outlet Yle on Tuesday, the Finnish customs agency is in control of 1,666 BTC worth more than €15 million ($16.23 million). The agency seized the bitcoin years ago in a major drug bust, but has yet to convert the cryptocurrency into euros. 

The report claims the agency is mulling its options in regards to the seized crypto. An original proposal to sell the bitcoin in 2018 as part of an auction was turned down due to concerns that the funds would fall back into criminal hands. 

Pekka Pylkkanen, Customs’ finance director, said the agency’s primary concern is money-laundering, 

From our point of view, the problems are specifically related to the risk of money laundering. The buyers of [cybercurrency] rarely use them for normal endeavours.

Juri Mattila, a researcher at the Finnish Institute of Economic Research, argued against the notion that bitcoin is used primarily for criminal activity, 

Nowadays there are other virtual currencies that are more difficult to track [by authorities] than bitcoin which may now be used in criminal activities.

Henry Brade, founder of cryptocurrency firm Prasos, told Yle that Customs should sell the crypto-assets to legitimate investors while downplaying the risk of money-laundering, 

Of course, if Customs sold off the bitcoin anonymously, the risks would be massive. But if they sold them in a sensible manner, I don't see a problem here.

In addition to bitcoin, the Finnish agency is also in possession of “millions of euros” in other crypto-assets acquired from criminal seizures over the years. 

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