World Bank: Cryptocurrency Like Ponzi Scheme
WASHINGTON - World Bank leaders compare cryptocurrencies with "Ponzi schemes". "In the case of using Bitcoin or some other cryptocurrency, we also observe it, but I tell you that most crypto is basically a Ponzi scheme." It's unclear how it works, "World Bank President Jim Yong Kim was quoted as saying.
The latest statement by World Bank officials is again questioning the legitimacy of digital currencies such as Bitcoin.
The lender "looks very carefully" with blockchain technology, a platform that uses what is called a distributed ledger that allows digital assets to trade securely.
"There is hope that the technology can be used in developing countries to follow the flow of money more effectively and reduce corruption," Kim said.
In 2017, the value of crypto currency in circulation soared. But then its value slumped, where Bitcoin's price lost nearly two-thirds of its value since mid-December.
While cryptocurrency technology has the potential to reshape global finance, there are concerns about volatility, potential for money laundering or other crimes.
In a speech this week, Bank of International Settlements chief Agustin Carstens said there was a "strong case" for authorities to control the digital currency because cryptocurrency is closely linked to an established financial system that can cause disruption.
While Federal Reserve Chairman Jerome Powell said that governance and risk management would be crucial for cryptocurrency.