To the director of the central bank of Portugal : “The Bitcoin is not a currency “

Helder Rosalino, director of the Portuguese central bank, Banco de Portugal (BdP), recently gave an interview to the local daily ECO regarding the Bitcoin, crypto-currencies and the technology Blockchain in general. For him, it is important that people know that “a crypto-currency is not a currency” for the central bank of Portugal.

Rosalino vigorously defending the traditional financial system

For the senior officer of the financial institution that is the BdP, a currency needs to both store of value and have the ability to be used as a credit. Always after Rosalino, when a central bank issues a currency, it creates a liability on its balance sheet. And this liability must be paid. “A currency, to be categorized as such, must have two fundamental characteristics : the first is to associate the idea of a store of value, then, on this currency, there must be a right to credit. “

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The crypto-currencies do not fulfill all the necessary conditions

Still according to the director of the Bop, the benefits of the industry Fintech are purely technological, because he sees great potential in the technology Blockcain, and not in crypto-currencies such as Bitcoin. He also added that a crypto-currency is not issued by a central bank or regulated by a financial institution that gives him the right to be used as a credit. Thus, in the same order of idea, Rosalino points out that a crypto-currency is not a currency in and of itself, but recognize its disruptive potential incredible.

When asked about the risks associated with crypto-currencies, helder Rosalino has quickly pointed out its “dimension speculative”. For him, such as crypto-currencies are generated by a process of mining, and its amount is limited. Thus, the demand increases and the speculation ensued. The increase in demand necessarily leads to a second problem, that of the volatility. According to Rosalino, the volatility associated with crypto-currencies is too high, and it is thus the duty of the central bank to inform and protect citizens.

 

Source : Cryptocoinsnews