Crypto Fans ‘LOL’ At BIS GM Claims that Bitcoin ‘May Break Down’

Bitcoin Central Bank

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Tim Alper

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Tim Alper

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Tim Alper is a British journalist and features writer who has worked at Cryptonews.com since 2018. He has written for media outlets such as the BBC, the Guardian, and Chosun Ilbo. He has also worked...

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June 26, 2023

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The crypto community has reacted with incredulity after a senior Mexican economist and the boss of the Bank for International Settlements (BIS) appeared to dismiss the notion of decentralized digital currencies such as bitcoin (BTC).

In a recent speech, Agustín Carstens, the General Manager of the BIS and the former Governor of the central Bank of Mexico, claimed that central bank digital currencies (CBDCs) would roll out in the next three years, and called BTC a risky investment – adding that the token might ultimately fail.

He said,

“Investors must be cognisant that Bitcoin may well break down altogether. Scarcity and cryptography alone do not suffice to guarantee exchange.”

Carstens added that “bitcoin is increasingly vulnerable” as “other [tokens] already have been majority attacked,” giving examples of smaller altcoin tokens that have been the target of attempted 51% attacks.

But his remarks have sparked a Twitter storm, with crypto fans rushing to the defense of the token.

Binance chief Changpeng “CZ” Zhao decided to look on the light side, writing,

“I was speechless for like two minutes, thinking about what one could say to that. lol…”

ShapeShift CEO Erik Voorhees, meanwhile, opined that “this is just getting sad,” as banks continue to underestimate the size of the challenge coming from decentralized currencies like BTC.

Others, meanwhile, took aim at Carstens’ suggestion that CBDCs were a viable alternative to crypto – or existing fiats, with one user writing:

“The idea of complete anonymity in a CBDC is a chimera…I expect CBDC holdings will not become very large. Therefore, the central bank toolkit could remain largely unaffected.”

As reported, as the world’s central banks are increasingly looking into CBDC projects, their focus is shifting into more advanced stages of CBDC engagement, with more banks moving from conceptual work to experimentation.

Meanwhile, popular Bitcoin podcaster Stephan Livera bristled, “Central banks, created and supported by the government, are antithetical to the very idea of sound money.”

Some agreed wholeheartedly with this sentiment, writing that it was “fascinating to see” the BIS talk about “sound money” in the “context of digital currencies.”

Saifedean Ammous, the author of The Bitcoin Standard, wrote that “sound money” was “still a completely nonsensical marketing buzzword” on the lips of the BIS, adding,

“Sound money is chosen on the market freely, not mandated by bureaucrats through government-enforced central banking monopolies.”

Others still had less nuanced reactions to Carstens’ claims.

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