The running of Bitcoin has not been easy. They have been attacked for various reasons like usage in crime and speculative bubble among others. The latest person to attack Bitcoin is BNP Paribas who has said the future of Bitcoin is limited because there is no Central Bank to control Bitcoin activities.
In their report at the Telegraph, BNP Paribas said that the future of Bitcoin is in danger because of the lack of a lender to make the last decision. They further said that the lack of a controller would result in risks and undermine monetary policy. BNP Paribus did not stop there as they went ahead to attack Bitcoin over its deflationary nature, its lack of regulation and further its high volatile nature.
Wheres Japan has already accepted Bitcoin as legal tender and took it as technology friendly other nations could go against that. The main concern by BNP Paribas is incased there is a financial crisis like it happened in 2008 there is no Central Bank that can regulate the products that are in Bitcoin.
Do we adopt a central Bank for decentralized currency?
Lenders and controllers are very important because they come in when liquidity dries up in markets. A good example is when banks are faced with returns of deposits they run to central banks. The central banks act as the lender to provide liquidity.
The need for a central bank operates in centralized systems. In decentralized currencies, there is absolutely no need for financial intermediaries to control people’s money. This is why the argument by BNP Paribas appear strange to the world of cryptocurrencies. In Cryptocurrencies, the possibility of liquidity drying does not exist.
Opinions on Bitcoin
There has been a lot of discussion around Bitcoin. Actually, everyone comes up with their opinion and suggestions about Bitcoin. This makes the discussion very broad. Some people have actually called Bitcoin an outright fraud. Others like Morgan Stanley have actually said that it’s even more than fraud.
Views are always expected to be different even within banks. Several years back the same bank BNP Paribas had said that Bitcoin was a destructive invention. It’s good to note that BNP Paribas is very active in Blockchain technology and has had experiments with transfers from Germany, UK, and Netherlands. This makes the future of Bitcoin not lie in the hands of researchers and those who giver personal opinions.