Agustín Carstens, the General Manager of Bank of International Settlements (BIS) has been very critical of cryptocurrencies in the past. In a recent interview with Basel-based media outlet, Carstens reiterated his stance on cryptocurrencies that they’re a bubble, a Ponzi scheme, and an environmental disaster.
When asked about mining and the concept of money, he said young people should stop trying to create money and people should not attempt to reinvent money. He 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!
Agustín Carstens conveniently fails 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 asks young people to stop trying to create gold or money from nothing. Once again, he fails 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. Money, on the other hand, is created by nations and its the nation that backs it. If the nation fails, its currency fails. Cryptocurrencies are not dependent on people or nations. It works all the time.