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Why Bitcoin is not a challenge for “national currencies”

With a 24-hour low of $ 53,611, the price of Bitcoin fell from its recent high of $ 61,000. In addition to a fall in prices, bearish feelings often arise. One such perspective on the crypto asset is Agustín Carstens’, General Manager of the Bank for International Settlements (BIS). In an interview with CNBC International On March 24th, the economist said he did not see cryptocurrencies like Bitcoin as a “challenge” for state money. Its reason was based on the fact that crypto-assets have not yet made “a lot of advances” in terms of payment methods:

[Private] Cryptocurrencies haven’t made much progress in terms of working as money, so I don’t see any challenge for government money derived from privately used digital currencies.

Carstens agreed that the crypto sector actually needs regulation as he believed that most cryptocurrencies are used to take advantage of arbitrage or to avoid some regulatory requirements.

In addition to his criticism, the economist shared his opinion on stable coins; He believed that the fiat back currencies had “very limited” uses. He believed that stable coins “have their own role for very specific purposes”.

In addition, the general manager emphasized the importance of reviewing the “international impact” on the issuance of state digital currencies.

This wouldn’t be the economist’s first negative comment on Bitcoin. At the start of the asset’s rally, as Bitcoin hit new highs, Carstens warned investors. He said the asset was “increasingly fragile” and could “collapse completely”. At the same time he stated:

Investors should be aware that Bitcoin can crash completely. Scarcity and crypto alone are not enough to guarantee an exchange.

However, the crypto asset has increased in mainstream adoption as companies like BNY Mellon, Tesla, PayPal, and MicroStrategy make their own decisions related to Bitcoin. Elon Musk recently resumed his Bitcoin craze Step forward.

He announced on Twitter that his company has decided to allow people to buy Tesla cars using Bitcoin, a payment option currently restricted to the United States. Interestingly, Musk said that bitcoin paid to Tesla “will be retained as bitcoin and not converted into fiat currency” – an indication that the company may continue to hoard bitcoin after investing $ 1.5 billion in February .

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