Cryptocurrencies Are Like Ponzi Schemes: World Bank
In its latest report, the World Bank compared cryptocurrencies to “Ponzi schemes”.
The World Bank Group President Jim Yong Kim gave his view on Wednesday event:
“In terms of using Bitcoin or some of the cryptocurrencies, we are also looking at it, but I’m told the vast majority of cryptocurrencies are basically Ponzi schemes. It’s still not really clear how it’s going to work.”
The development lender is “looking really carefully” at blockchain technology, which is a platform using distributed ledgers, which allow trading digital assets securely. Kim said, they hope the technology will be used in developing countries.
Since the mid of December 2017, when the price was at its higher marks, Bitcoin has lost nearly two-thirds of its value.
There were concerns raised over cryptocurrencies, due to the volatility and the potential for money laundering or other crimes, but also have to say that cryptocurrency technology has the potential to reshape global financial system.
The chief at Bank of International Settlements Agustin Carstens said in his speech, that there is a “strong case” for authorities to rein in digital currencies because their links to the established financial system could cause disruptions.
Jerome Powell, who is Federal Reserve Chair said, that “governance and risk management will be critical” for cryptocurrencies.