In the opening speech of the Bundesbank Symposium on “Prometheus and Epimetheus in the digital age,” said Dr. Jens Weidmann, President of the Deutsche Bundesbank, to crypto-currencies like Bitcoin, Ripple, Ethereum & co. Here one encounters some of the well-known Contra-Bitcoin arguments.
By Phillip Horch
On 29. May 2019BTC$8.703,00 0.08%part Facebook Twitter LinkedIn xing mail
Dr. Jens Weidmann currencies dedicates his speech to the subject of Crypto. It talks Bitcoin & co. first of all, the ability to fulfil the key functions of money:
to fulfill The Central functions of money in an economy [crypto-currencies] anyway. Given the price fluctuations are crypto-Token is neither a reliable store of value and as unit of account. And also as a medium of exchange, they are very rarely used, because the transaction costs are often high and the resolution is comparatively time-consuming.
in addition to this lump-sum of all crypto-currencies Weidmann also on the topic of energy to speak at Bitcoin. It continues:
A factor is necessary for the great energy: in Our estimation, a Bitcoin transaction used at the beginning of last year, more than 400,000 times as much electricity as a normal Transfer. According to a January 2019 study published in the BIZ sees banks of 63 respondents Central, not a single Token in your country, a significant use of crypto. After the Token underlying Distributed Ledger technology is but.
The one or the other may have heard these arguments already: Bitcoin, no, thank you; Blockchain, Yes please! Accordingly, the President refers to a common Blockchain-project of the Bundesbank and the German stock exchange for the securities settlement. Here, a prototype is already developed, the result seems so far, however, grow:
the result is that the tested variants have proved, in principle, suitable for large-volume use. Compared with the currently used systems, the Blockchain solutions not performed, however, better in all respects: The processing took somewhat longer and caused a relatively high computational cost.
Dr. Jens Weidemann via the digital Central Bank money
In addition, Dr. Jens Weidemann also commented on the possibility of a digital Central Bank money. This mountains, while understanding the Potential, is, however, also enjoy with caution. Because it could have, so Weidemann more, you may have a serious impact. Among other things, it will change the Intermediation on the financial markets fundamental. The influence, moreover, in terms of volatility on the balance sheet of the Central Bank. In addition, digital Central Bank could jeopardize monetary stability of the financial system under certain circumstances:
[t]he financial stability [would be] in the event of a crisis, perhaps more vulnerable to the risk than it is today, because with a digital Central Bank money, there would be an additional, very liquid and safe investment alternative. Therefore, both “flight to safety could expire” in General, as well as a digital Bank Run in the Special faster and to a greater extent than in the past.
Nevertheless, it is the task of the Central banks, the citizens of modern, fast, and also web-enabled to offer a method of payment. Thus, it was important to develop “in the sense of the consumer solutions on the pulse of time and technology without unnecessary risks for financial stability to respond.”
conclusion: Little New about Bitcoin & co.
Really new insights, the speech of the President of the Bundesbank does not deliver, however. The arguments are likely to be in the circles of the crypto-Community is already known. If you want to know on the subject of energy consumption and money suitability of Bitcoin, was however, referred to these two articles.
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Bundesbank President Weidmann: crypto-currencies are “economically and ecologically inefficient,” Bundesbank Executive Board: Crypto-currencies currently, there is no danger for the state’s money monopoly, Central banks and Bitcoin – A journey around the globe (part 2)