The Bank for International Settlements (BIS), announced that they might have to delve into cryptocurrencies. General Manager Agustin Carstens, said, “It might be that it is sooner than we think that … we have to create our own digital currencies.” BIS added that it was all ready to set up a ‘hub’ Hong Kong, Singapore and Switerzland, designed to improve understanding of digital currencies for use by central bankers.
A statement from the central bank said, “There needs to be demand for central bank currencies and it is not clear that the demand is there yet.”
Last year, Carstens had said, “Glance back into the past and you will see that creating gold or money from nothing has been a regular obsession. It never worked. … So my message to young people would be: Stop trying to create money!”
At the time, we had noted that Carstens conveniently failed to miss out that most nations have the ability to create money however they see fit. This has resulted in disasters for multiple economies, like Venezuela which is suffering from hyper-inflation now. In fact, the inflation in Venezuela has gone up by 40,000% in 2018 alone.
Money has always been an evolving medium. First it was the barter system, then it was precious metals, and then it was the unlimited currency notes. Cryptocurrencies have more properties of an ideal currency than most national currencies.
Carstens also asked young people to stop trying to create gold or money from nothing. Once again, he failed to remember that value for gold and money was created from nothing. In early days, people assumed gold was valuable because it was hard to mine. Other than that, gold has extremely limited utility value. Bitcoin on the other hand, is even more limited than gold, which may make it more valuable.
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