Governor Of The Belgium Central Bank: Bitcoin Is Not A Threat Because It Is Not “Stable”
Governor Of The Belgium Central Bank: Bitcoin Is Not A Threat Because It Is Not “Stable”
Earlier this week, Governor of the National Bank of Belgium, Jan Smets, said in an interview that Bitcoin was not a threat to central banks because it is not stable.

“It’s when the euro is not stable,” said Mr. Smets, adding that “creating a digital cash base blockchain could lower our limits to lower interest rates below zero.”

Wrong argument
Smets also pointed out that Bitcoin can not be used as a currency due to its lack of a central office and the authorities that monitor the network. He also noted that most investors in markets Bitcoin and Cryptocurrency speculate on the development of cryptocurrencies and as such, the investment risk in the Bitcoin is currently weak and could quickly increase in the short term.

A translated transcript of the interview between Smets and the Belgian news publication VRT read:

“Demand Stop Bitcoin Currency. Unlike the euro, Bitcoin is not guaranteed by a central bank or government as a payment, so Bitcoin is not a currency. Although there is a low risk of investing in Bitcoin, there are potential consequences for financial stability.

According to Smets, Bitcoin is not stable like the euro due to the lack of a central processing unit and a central bank. He pointed out that it is difficult to trust Bitcoin as a motto.

Bitcoin, however, is specifically designed to function as a financial system and a network without trust. The purpose of Bitcoin and the biggest advantage over other stores of values ​​and currencies is that the Bitcoin network allows users to send and receive payments in a P2P environment (decentralized peer-to-peer), eliminating need for relationships, based on trust. Intermediaries and third party providers.

Fiat currencies or government-issued currencies are also less stable than cryptocurrencies such as Bitcoin and other assets such as gold due to their inflationary nature. A fiduciary currency like the euro is manipulated by its central bank, which regulates the circulation and delivery of money.

Some central banks contain Bitcoin
Earlier this year, the Bank of Finland published a research paper entitled “Monopoly Without Monopoly: An Economic Analysis of the Bitcoin Payment System” for the sole purpose of describing bitcoin’s unsecured and decentralized system.

“Bitcoin is a monopoly run by a protocol, not a manager organization. The trusted monopolies operated by a discrete management organizations to determine and change the prices, offers and rules. Monopolies are often regulate to prevent or reduce their abuse of power, “according to the Bank of Finland newspaper.

The Central Bank of Finland has encouraged economists to study the structure of Bitcoin, as it has introduced the first decentralized financial and payment system in the history of the global financial market. Researchers from the Bank of Finland added:

“The conception of Bitcoin as an economic system is revolutionary and deserves the attention and control of an economist, even if it was not functional, and its apparent functionality and usefulness should encourage economists to study this structure.”

Bitcoin is a threat to central banks and government agencies because it is the first value and money system that can separate money and state. It undoubtedly removes the most powerful tool of governments that is their monopoly on the global monetary system

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