Another Central Bank Warns Of Bitcoin Risks

Another Central BankWarnsOfBitcoinRisks

First theECB, then theFed, and now the Dutch central bank have come out and explicitlywarnedofthedangersof virtual currencies like Bitcoin and Litecoin. Their explicit statement this morning, raising questions about deposit guarantees, central issuer responsibility, and volatility do their best to inform potential users (or traders) of the alternative currency that it is the devil incarnate. It seems, despite the mainstream media’s guffawing at the swings and outrageous fortune in the market’s early days, that thepowersthat be seethesecrypto-currencies as anythingbutbenign.

ViaDutch Central Bank,

Consumersshould be awareoftherisksof virtual currency

The emergence and growing popularity of virtual currencies (like bitcoin, litecoin, etc.) are followed by the Dutch Central Bank (DNB) with attention.

Thedevelopmentsaround virtual currenciesgofast.

At present the state of affairs as follows: virtual currencies fall outside the scope of the Act on Financial Supervision. DNB thus no monitoring of these virtual currencies. Nor, she oversees companies acting herein.

DNB suggests that consumers should be aware of this and willhavetorealizetheriskstheyrunwhentheybuycurrencieslikebitcoin.

The exchangerateisvolatileandthereis no central issuerwhichmay be heldliable.

Also, thedepositguaranteeschemedoesnotapply.

If this small market cap vicrtual currency is such a "gimmick" as some have said, why are the world’s central banks so afraid?

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