BIS Chief Says Cryptocurrencies Don't Pose Challenge to Fiat Money

In his March 24 interview with CNBC International, Agustín Carstens, an economist who serves as the chief of the Bank for International Settlements, said that cryptocurrencies like Bitcoin still do not pose a threat to sovereign money since they have not made "many inroads" to challenge it:

I don't see any challenge, I would say, to sovereign money coming from these privately-used currencies.

Carstens maintained that cryptocurrencies are mainly used to take advantage of arbitrage opportunities or skirting regulatory requirements:

 When it comes to stablecoins, he noted that they had "very limited" applications:

They have their own role for very specific purposes.

The chief banker also mentioned that it was important to assess the "international ramifications" of central bank digital currencies.

Countries like China and Sweden are currently at the forefront of the ongoing CBDC race, but Federal Reserve Chairman Jerome Powell recently mentioned that the U.S. was in no rush to develop the digital dollar.

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Carstens' ludicrous Bitcoin warning

Back in January, Carstens made headlines after warning that Bitcoin could "break down" without getting into the specifics of such a doomsday scenario:

Investors must be cognizant that Bitcoin may well break down altogether.

Bitcoin has soared over 100 percent since that comment, surpassing $60,000 for the first time on March 13. The cryptocurrency is trading decisively in the green today after Tesla officially enabled Bitcoin purchases.