Cryptic stimuli are currently very popular. A Wall Street analyst now explains what conditions must be fulfilled to make Bitcoin and Co. legal legal currencies.
Francisco Blanch has been involved in the debate about the acceptance and legality of cyber money. According to Head of Global Commodities and Derivatives Research at Bank of America Merrill Lynch, currencies issued by central banks are characterized by three key characteristics: security, liquidity and income.
On the basis of these criteria, Internet money would also have to be measured. However, on this basis bitcoins are still far from being a true currency.
Security with a big question mark
The lack of a central oversight, according to Francisco Blanch, makes bitcoins susceptible to chaos, hacker attacks, identity theft and fraud.
This was shown again in July 2017, when a Russian was arrested in Greece because he was supposed to have washed at least four billion dollars over Bitcoin. The 38-year-old had operated a criminal organization since 2011, which manages the most important website for cycled criminality, said the police.
And also in May 2017 the worldwide Cyberattacke with the worm Wannacry showed that the anonymity of Bitcoin, the cyber currency makes for criminals very attractive. The hackers demanded from holders of lame infrastructures the payment of a ransom in Bitcoin.
In addition, the high volatility of bitcoins undermines its credibility. However, the fluctuations in value have declined in recent years, i.e. In terms of volatility, an improvement took place.
In addition, Blanch points out that disputes about an adaptation of the underlying blockchain techology almost led to a cleavage of the bitcoin. During this time, the digital currency has laid a massive downward trend on the ground.
"I have repeatedly warned that bitcoin systems should be viewed as safe, and it is precisely a virtual currency that has no real value base," says Carl-Ludwig Thiele. At a symposium in Frankfurt, the member of the board responsible for payment transactions in Frankfurt pointed to the advantage of the money created by central banks and banks, which ultimately guaranteed the state. "There is no one behind virtual currencies, it is created out of nowhere by people who are usually not familiar with clues, and according to rules that an unknown body decides on."
Despite the rapid price increase, Thiele warns against an investment in Bitcoin. "Bitcoin is a speculative object whose value changes rapidly." From the Bundesbank's point of view, bitcoin is not a suitable medium for storing values. This is a look at the "very fluctuating course development".
Jens Weidmann, President of the Deutsche Bundesbank and one of the most powerful men in the financial world, has also commented on bitcoin: "For him, the driving force behind the current high demand is" the hope of a high return ". He warned: "As far as investments in Internet money Bitcoin is concerned, I would be cautious: because of the strong price fluctuations and the low depth and transparency of the market these are certainly not risk-free."
Improvement in liquidity
How liquid a currency is is how easy it is to buy and, above all, to sell. In this regard, cryptic payments have clearly improved in recent quarters. On the one hand, the market value and the daily trading volume of cyber money has grown exponentially, on the other hand it is increasingly accepted by companies as payment means - e.g. From Microsoft.
However, the crypt curiosities are not yet accepted by major online retailers. So far, only largely unknown shops have accepted bitcoin payment, which is certainly one reason why consumer acceptance is still lacking.
The fact that cyber currencies nevertheless have a future potential is shown by the fact that some countries have already opened up to bitcoin: Australia and Japan have officially recognized the digital currency as a legal payment.
High income through appreciation
Cybermoney has no interest rates fixed by a bank. In terms of asset diversification, too, krytotes have little to offer to investors, as they are not correlated with precious metals, stocks, bonds or other currencies. However, this year Bitcoins have made a phenomenal price increase and cracked one record after another.
Financial Institutions Decide on the Future of Bitcoin and Co.
Whether Internet money in the future will be able to enforce, according to Francisco Blanch depends on whether it is accepted by banks as collateral for granted loans.
According to the expert of the Bank of America Merrill Lynch, however, cyber money has not yet been deposited with any major financial institution as collateral. Despite its enormous price increase, the Bitcoin thus still has a long way to go.