‘Crypto is a gold rush with no gold’, says ECB official

Yves Mersch, member of the ECB executive board, has seconded that opinion of the head of the Bank of International Settlements, who called dubbed Bitcoin a ‘Ponzi scheme’.

He said: “The question is not so much that these virtual currencies are already at a level that would cause huge disruption in the real economy, but we are currently more concerned about the social and psychological effect they seem to have.

“In this respect money has to do with confidence and that’s why we, central bankers, fell that we have a certain role to play to preserve confidence of the public in our legal tender. There is so much money flowing in that it’s like a gold rush – but there is no gold.”

Mersch echoes many common worries about the volatility of crytocurrencies at a time when it’s zeitgeisty-status is attracting more and more newcomers. He also expressed concerns about virtual currency’s potential impact on the ‘real world’.

“There is an area of investor protection, then there is oversight of the financial market infrastructure,” he added. “If you increasingly have bridges between the virtual world and the real world and then there is a collapse in this virtual world, it could drain liquidity from the real world. This then becomes a conern for the central bank.

“What is relevant to us is that we protect the functioning of our open market economy. At the same time if someone wants to play Casino, let him do it, but then we shouldn’t mutualise losses with the rest of society.”