The Bank for International Settlements launches an offensive strategy against cryptocurrencies.

The Bank for International Settlements launches an offensive strategy against cryptocurrencies.

The General Director of the Bank for International Settlements Augustin Cartens recommends that central banks regulate the use of cryptocurrencies, including bitcoin, primarily for conversion into real currencies.

The attack is frontal and it’s conducted on behalf of consumers and investors whose confidence in the currency and financial institutions today is endangered by the proliferation of cryptocurrencies. “Bitcoin makes it clear that while perhaps intended as an alternative payment system with no government involvement, it has become a combination of a bubble, a Ponzi scheme and a disaster for the environment” said the head of the BIS on Tuesday morning at the conference organized by the Bundesbank, the German central bank, at Goethe University in Frankfurt.

Relatively little known by the general public, the Bank for International Settlements (BIS), headquartered in Basel, Switzerland boasts the oldest international financial organization. Established in 1930 to regulate the terms of war reparations imposed on Germany, it has continued to be a hub for international financial cooperation, to the point of defining itself as the “bank of central banks. Without being a universal organization like the IMF (The International Monetary Fund) that unites just over 190 states, the BIS brings together the 60 largest central banks. It ensures cooperation like mutual payments the harmonization of prudential rules for national banking systems.

Lloyds Bank forbids customers from purchasing bitcoin using credit cards

UK-based Lloyds Banking Group said on Monday, February 5 that it has banned credit card customers from buying bitcoin, following the example of several major US banks that are worried about debt problems.

A spokesman for the banking group said “Accross Lloyds Bank, Bank of Scotland, Halifax and MBNA (its subsidiaries), we don’t accept credit card transactions involving the purchase of cryptocurrencies”.

This is the first major British institution to unveil such a decision that comes as bitcoin continues to dive. Now it’s under $ 8,000, far from the $ 20,000 touched in December.

Lloyds’ decision only targets credit cards, which make it possible to make purchases by indebtedness, which is likely to fuel speculation around cryptocurrencies by individuals who are not always solvent.

As reported Bloomberg, In the United States, banks JPMorgan, Bank of America and Citigroup each announced a similar move late last week.

The use of bitcoin has been the subject of multiple warnings by authorities and central bankers around the world, even though some large American stock exchanges have launched contracts reserved for professionals, giving some legitimacy to this asset.

In the United Kingdom, the government called in late January Davos to regulate bitcoin quickly, before it can end up representing a real threat to the financial system.

Virtual currency is particularly volatile – it can lose or earn hundreds of dollars in less than an hour – and escapes any regulation at this time.

South Korea and China have already taken initiatives to better regulate it and the French and German finance ministers will present joint proposals at the G20 Finance summit planned for Buenos Aires in mid – March.

Written by Vincent Ashton