ZURICH: The Bank for International Settlements (BIS) warned digital currencies like bitcoin could overwhelm and break the internet if they continue to grow. The BIS, often described as the central bank for central banks, also warned, in a 24-page report published on its website on Sunday, cryptocurrencies cannot be trusted the way sovereign currencies can. Unlike central bank-issued denominations, virtual currencies are produced, or “mined”, by banks of computers solving complex algorithms and then freely traded online. The other key difference with typical currencies is that the number of bitcoin in existence can never exceed 21 million. There are currently some 17 million bitcoins in circulation. Bitcoin’s surge in value from a few cents to a peak in December 2017 of $19,500 turned some of its first investors into billionaires. More broadly, the BIS raised long-standing regulatory concerns over the use of cryptocurrencies, particularly with regard to money laundering and financing of terrorism.
Published in The Express Tribune, June 19th, 2018.