Crypto Has 'Amplified Financial Risks' in Emerging Markets, Central Banks Say (ft.com) 40
Cryptocurrency assets have amplified rather than reduced financial risks in less developed economies, and regulators will need to treat them in the same way they oversee other assets, some of the world's most powerful central banks have warned. From a report: Novel solutions to payments challenges should not be classified as 'dangerous' simply because they are different, the Bank for International Settlements said on Tuesday. However the global central banking body added that the appeal of crypto was "illusory," in a paper published on approaches to regulation. The Consultative Group of Directors of Financial Stability, which includes representatives from central banks of the US, Argentina, Brazil, Canada, Chile and Mexico, said crypto had been promoted as a low-cost payment solution and substitute for national currencies in countries with high inflation or high exchange rate volatility. "However, crypto assets have so far not reduced but rather amplified the financial risks in less developed economies. Therefore, they should be assessed from a risk and regulatory perspective like all other assets," it said in a 50-page report. Watchdogs including the IMF and the Bank for International Settlements have been charting the evolving financial stability risks from the cryptocurrency market as it ballooned from a nascent industry to one whose value peaked at $2.9tn in November 2021.
Cpt Obvious says: (Score:1)
Re: Cpt Obvious says: (Score:3)
Bankers: "WTF, we can't fractionally reserve it. Dump ehhht!"
(As they light their cigars with burning $100 bills.)
Re: Cpt Obvious says: (Score:2)
A lot of regulations don't minimize risk at all, they are milking cows for banks to exploit.
Crypto is being used a lot as payment method from/to people in developing countries. Cutting out the middle man circumvents the entire businesses model banks have setup to skim "costs" off payments.
Re: Cpt Obvious says: (Score:2)
Prove it. And, even if your statement is true, it is only sort of true. Iâ(TM)d say almost no one in your example is using crypto independent of the various intermediaries that exist to make the transaction happen. In the real world, those are called banks. In the crypto world theyâ(TM)re called â¦â¦. let me check my crypto-bro bullshit glossary to find the right word. My simpleton mind canâ(TM)t come up with the term-du-jour. Ah, screw it. Letâ(TM)s just call them
Unfortunately (Score:2, Insightful)
If one could save without losing purchasing power, they could focus on being the best at their craft, instead of constantly juggling their wealth around and following charts and financial news.
Re: (Score:3)
Re: (Score:2)
Re: (Score:2)
All of your examples are of ways of extracting money from the economy without contributing to it. This is representative of the view of the investor class -that you are owed ever more wealth because you have wealth.
Alternatively, consider investing your excess funds into your business. Buy more goods to sell in your store. Hire more staff to offer new services. Plant more fields to grow more food. Add a production line to your factory. These are things which grow the economy while earning you a return
Crypto competes with central banks (Score:1, Flamebait)
Re: (Score:1, Troll)
Dear moron, read some history about *why* central banks formed.
TL:DR because before them, assholes like you played with deposits the was crypto's a Ponzi scheme.
Re: (Score:1)
There is a reason why central banks love inflation. The rich don't have their value in money. They have it in real estate and other things. Poorer people's main value store are paychecks, where if they are constantly losing value, it is a wealth transfer. This is why China's deflationary recession will be a lot less damaging to their economy than the inflationary recession in the US. If someone has currency in a mattress in China, they can still afford stuff. The currency under a mattress in the US is
Re:Crypto competes with central banks (Score:4, Informative)
Um, you have cause and effect backwards. Inflation, enforced by the central bank, is what forces "the rich" to have their money in actual assets that participate in the economy. Because actual economists learned long ago that not doing so leads to large-scale economic instability due to "the rich" hoarding currency. You are speaking gibberish if you call a "paycheck" a "store of value". And I don't know why you are under the mistaken impression that China's central bank doesn't manage inflation just like all the others do, targeting 2-3% per year. Your ideas about "cryptocurrency" (aka public ledgers) are pretty quaint. It's like banking with a bookie, yeah you can do it, but it is generally a terrible idea.
You seem to be one of those people who thinks that the fed is supposed to prevent any economic "badness" by magic. No, they are just supposed to try to keep the currency stable with as little direct impact as possible. And it is an imperfect process. So the fed can't "stop" a recession that is caused by real world forces - but they can try to time changes to maintain a stable currency in ways to reduce their recessionary impact. They also can't completely account for inflationary pressures - literally nobody, not even the Ukrainians, thought Putin would be dumb enough to invade Ukraine. Once everyone realized they were wrong - and that they may be wrong about Xi - there was a lot of rearrangement of the global economy that needed to happen. Everything *really did* get more expensive in real terms. Things are cheaper when people trust each other. Inflation is how this propagates through a free market economy - some people will need to adjust their standard of living, some will need to get a different job, some tasks may not be economically viable anymore. That's all *reality*. Inflation, and how people and businesses are able to respond to it, is just how the information flows through the market.
Re: (Score:2)
Re: (Score:2)
Pyrite Pete's failed prediction (Score:1)
On Monday April 26, 2021 @02:16AM UTC, Pyrite Pete [urbandictionary.com] had said:
That was back when bitcoin had already fallen, and down to about $47K at the time. It should've been back up to "twice its value" no later than June 26 2021 - over 2 years ago. It is now sitting at only about $26K.
Now that's what I call a prediction #FAIL!
New feature segment on Slashdot coming next year! (Score:1)
"splitstem's failed prediction"
Promises, promises (Score:3)
Wait until the end of the year, and BTC likely will be in the six digit range
LOL the bros have been promising everybody that for years. Even Slashdot, the crypto pushers, have had two [slashdot.org] polls [slashdot.org] about it - and it never materialized.
Are you tired of losing yet?
Cryptocurrencies will cause the next meltdown (Score:1)
Ironic how they'll eventually cause another economic meltdown - the very thing they were born out of, and claimed to want to prevent.
someone, mod this up as funny, please (Score:2)
Ran out of my mod points...
Re: (Score:1)
From the summary:
They're not saying they're more unstable than stocks or bonds, they're saying they need to be regulated as such, *not* as currencies or a payment system, as the cryptobros claim. Cryptocurrencies are considerably more volatile than comparable stocks of the same apparent capitalization, so they are potentially m
Re: (Score:1)
Good luck regulating them. At the worst, it would be another Prohibition, as people use TOR or even offline validation. It just seems like as soon as Bitcoin wasn't going skywards, governments found an excuse to pounce on it and blame it for the economy, and try to drive everyone away from it. Governments know that maybe China or North Korea might succeed in banning crypto-currencies, it means evolution of better ones that make Monero and Zcash look like amateur attempts for anonymous transactions.
Re: (Score:2)
Governments around the world regulate securities quite successfully.
Re: (Score:1)
Re: (Score:2)
Confessions of an Economic Hitman (Score:1)