Posted on

German Central Banker: Cryptocurrencies Must Be Regulated n a Global Scale

The director of German’s central bank believes that bitcoin should be regulated through an international set of rules rather than on a national scale.

Bundesbank director Joachim Wuermeling said that borderless cryptocurrencies are difficult to regulate within a specific region or country, according to Reuters. Speaking at an event in Frankfurt, the banker said cryptocurrencies instead be overseen on a global scale, with regulators harmonizing their rules together.

To that end, Wuermeling said that such a state of affairs could only be reached in the event of heightened cooperation.

He was quoted as saying:

“Effective regulation of virtual currencies would therefore only be achievable through the greatest possible international cooperation, because the regulatory power of nation states is obviously limited.”

His remarks follow developments out of China and South Korea on the regulatory front. Notably, South Korea was reportedly planning to shut down exchanges, though those rumors were later walked back by the president’s office.

However, South Korea is acting on new regulations to slow down speculative investing in cryptocurrencies by forcing banks to comply with new know-your-customer rules and imposing fines on investors who refuse to cease using anonymous virtual for cryptocurrencies.

Meanwhile, China has indicated it might try to reduce mining activity by withdrawing tax and power benefits for companies.

Regulations image via Shutterstock

The leader in blockchain news, CoinDesk is an independent media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. Have breaking news or a story tip to send to our journalists? Contact us at news@coindesk.com.

Posted on

Former Bundesbank Chief: Bitcoin Doesn't Meet Full Definition of a Currency

The chairman of Swiss banking giant UBS doesn’t believe that bitcoin meets the full definition of a currency, according to new statements.

Axel Weber, who previously served as head of the Bundesbank, Germany’s central bank, made the remarks during an event in Zürich earlier today, according to Reuters.

After noting that his skepticism toward the cryptocurrency “probably comes from my background as a central banker,” Weber argued that in spite of arguments to the contrary, bitcoin only partially satisfies the common definition of a currency.

He told event attendees:

“The important function of a currency is, it’s a means of payment, it has to be generally accepted, it has to be a store of value and it’s a transaction currency. Bitcoin is only a transaction currency.”

Weber reportedly criticized the cryptocurrency market back in late 2015, according to a report at the time from City A.M. He is said to have remarked that the bitcoin model is set to fail “because there is no lender of last resort – there will always be boom and bust.”

The UBS chairman becomes the latest figure from a major financial institution to weigh in on the topic of cryptocurrencies. Just yesterday, Lloyd Blankfein, the CEO of Wall Street investment bank Goldman Sachs, took to Twitter to offer an open (if not neutral) perspective on bitcoin.

Image Credit: International Monetary Fund/Flickr

The leader in blockchain news, CoinDesk is an independent media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. Have breaking news or a story tip to send to our journalists? Contact us at [email protected].

Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Please conduct your own thorough research before investing in any cryptocurrency.

Posted on

Germany's Central Bank: Consumers Won't Use Blockchain for Payments

Germany’s central bank has published a new research paper centered on distributed ledger tech (DLT), exploring its use for payments, securities settlement and more.

Researchers from the Deutsche Bundesbank wrote in the paper that the tech “offers a number of benefits on account of the distributed storage of data” – highlighting both the potential opportunities as well as some of the practical challenges any application might create.

In an English-language explainer published alongside the paper (the original version is in German only), the German central bank noted that it doesn’t see much of a role for the tech in consumer payments, arguing:

“The Bundesbank’s experts see little prospect of DLT being put to widespread use in the field of individual and retail payments given the current state of the art. Particularly for payments within the euro area, they argue, the systems in operation have already been optimised for fast transfers and require a minimum of reconciliation, besides being able to process millions of transactions with ease every day.”

That said, the Bundesbank’s researchers went on to say that they see a potentially wider role in instances in which users have to send their funds through multiple intermediaries.

“International payments are very frequently settled via correspondent banking networks – where one bank has a business relationship with another credit institution operating inside the currency area with which it intends to settle payments,” the researchers wrote. “For payments like this, DLT could streamline a number of process steps and offer faster and cheaper settlement for end users.”

The central bank strikes a more cautious note about applications in the area of securities settlement. This is notable, given that the Bundesbank had previously undertaken a blockchain-based securities trading trial with exchange operator Deutsche Börse.

According to the central bank, it is “still unclear whether DLT also has the edge over today’s technology in terms of security, efficiency, costs and speed.”

Image Credit: Oscity / Shutterstock.com

The leader in blockchain news, CoinDesk is an independent media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. Have breaking news or a story tip to send to our journalists? Contact us at [email protected].