Bitcoin Evil Spawn Of The Financial Crisis Ten years ago we saw the Lehman failure, but it was also when the domain bitcoin.org was first registered and when “Satoshi Nakamoto” posted the original Bitcoin white paper. A few months later, Satoshi mined the first so-called genesis block and got a reward of 50 bitcoins. The rest is history, as they say. Few remember that Satoshi embedded the genesis block with a Times headline from January 2009 about UK banks’ bailout. In more ways than one, Bitcoin is the evil spawn of the financial crisis. see the full report here
Lightning may strike me for saying this in the Tower of Basel – but Bitcoin was an extremely clever idea. Sadly, not every clever idea is a good idea. The opportunities of the blockchain are many, but the problems of Bitcoin are also plentiful. I believe that Agustín Carstens summed its manifold problems up well when he said that Bitcoin is “a combination of a bubble, a Ponzi scheme and an environmental disaster”.
The CPMI started studying cryptos and the underlying distributed ledger technology (DLT), including blockchain, early on. Back in 2015, we released a report on cryptocurrencies – today, for well-known reasons, we like to speak of them as assets – and last year we published an analytical framework for looking at DLT.That said, there is still much that we do not understand, and things are moving rapidly.
Closer to our realm, this relates, of course, to central banks themselves using DLT to issue their own digital currencies. Earlier this year, we, together with the Markets Committee, published a first study on central bank digital currencies (CBDCs). This is a particularly pressing issue in countries where demand for cash has been declining sharply. Sveriges Riksbank, for example, may soon start an inquiry to draw up concrete proposals for the amendments of the Sveriges Riksbank Act to eventually pave the way for the introduction of the e-krona.
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