"Even if bitcoin does not today meet the conditions to become a credible
means for investment that could therefore threaten financial stability,
it represents a clear financial risk for those that hold it," the Bank
of France said in the report
The central bank said the us of bitcoins as an investment tool is
limited because there is no underlying asset and the virtual currency is
subject to high volatility. Speculators are also at risk, the bank
said, as they would have no legal recourse if they are victims of theft
from hackers, and could be caught out if nobody wants to buy their
bitcoins.
"The system can collapse at any moment if investors want to unwind their
positions but find themselves holding portfolios that have become
illiquid," the report said.
The report also said the risks mean there is little-to-no reason for
retailers to accept the currency, apart from as a means of
self-promotion.
The report coincides with a statement from the People's Bank of China,
which said it doesn't consider bitcoin to be a real currency and
financial institutions should not provide bitcoin-related business
services.
Beyond the risks to investors, retailers and speculators, France's
central bank, like China's, also flags the dangers of bitcoin as an
anonymous currency that can be used for illegal activities, including
money laundering and terrorism.
Oh are the elitists getting scared?...for shame.
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