Bank of International Settlements (BIS) officially takes a stand against Bitcoin and the rest of the digital currencies. The so-called “central bank of central banks” published in 24 pages an analysis explaining why it does not cover the digital currency.
According to the analysis of the banking institution based in Basel, Switzerland, Bitcoin suffers from “structural weaknesses” that prevent the coin to cope with the noise that has been created around it. Among the concerns is that Bitcoin and the rest of the digital coins are “unstable,” consuming enormous amounts of energy, and are exposed to fraud that leads to theft of real money.
Above all, however, BIS emphasizes that the decentralized nature of Bitcoin and other digital coins – where it often appears as a powerful element – is in fact a deadly blemish. This is based on the bank’s calculation of what would be required if the digital currencies were called upon to carry out all the digital transactions currently made by national systems.
Based on the findings of this survey, the amount of transactions would overpower everything, from personal devices to servers.
However, while BIS concluded that digital coins do not work as regular money, it believes there may be some useful applications for them, as a tool for sharing new technologies. For example, they can efficiently carry out close and cheap transnational capital transfers.
The findings of the BIS come at a time when the “currency” of digital coins has not fallen. That is why many questions arise as to their legal status. In a speech last week, an official of the US Securities and Exchange Commission said the Authority decided that Ethereum – a famous digital currency – can not be recognized as a premium. However, the legal position of the rest of the cryptogonists has not yet been clarified.