The governor of the brazilian central bank likens bitcoin to a pyramid system

At the beginning of the week, the governor of the central bank of Brazil has taken a strict approach towards the bitcoin, comparing it to a pyramid scheme. According to RttNews, Ilan Goldfajn, was little favourable to the rise in the price of bitcoin. He stated that it was essential to separate the Bitcoin of other investment assets. He explained that the principle is the same as the one used in scams pyramid schemes.

The governor of the brazilian central bank stressed that bitcoin is a financial asset without value that users buy because they believe that its price will increase.

Agência Brasil Fotografias, Wikimedia Commons

The principle of a pyramid system

In a pyramid scheme, the companies seek investors who are then encouraged to find themselves new buyers, creating a revenue stream based on new investments rather than on the product itself.

Goldfajn continued by confirming that the central bank of Brazil is not interested in bubbles or illicit payments. He added that the central bank does not wish to encourage these activities. This statement is surprising, given that the brazilian government is currently working on the regulations of the market of crypto-currencies in the country. These comments will have an impact on this process ?

The same position as China ?

Recently, China banned the trade of virtual currency. Moreover, the chinese government has already proceeded to the closure of many companies specialized in the field. Although the brazilian government for the implementation of regulations to control the market of Bitcoin, the governor of the central bank is not of this opinion.

In 2014, the central bank has already published a report on the risks associated with investing in crypto-currencies. This institution considers the digital currency as a fraud and a way for crooks to launder money. The position of the governor could influence the policy put in place by the State to develop these crypto-currencies in the country ?

Source : CoinDesk