June 18 (UPI) — A panel of banking experts have rejected cryptocurrencies as too flawed, too short-sighted and too unstable to become workable fixtures in world monetary matters.
The assessment was made in a 24-page report Sunday by Switzerland’s Bank for International Settlements, an agency considered a central bank for central banks.
The BIS said bitcoin and similar cryptocurrencies have “a range of shortcomings” that prevent them from becoming usable government-backed currencies. For example, the fact they are not tethered to national currencies or precious metals, like gold, is regarded by the BIS as a serious flaw.
The report also said cryptocurrencies are unstable and too vulnerable to fraud to serve as a real store of value.
Further, the bank said a calculation of cryptocurrencies to process all digital retail transactions currently handled by national systems indicates the global economy would be overwhelmed by such a large volume of transactions.
“The associated communication volumes could bring the Internet to a halt,” the BIS report said.
The experts noted cryptocurrencies also require too much electricity, since bitcoin miners processing transactions use about as much electricity as the entire country of Switzerland.
The BIS suggested bitcoin could be useful in “niche settings,” but concluded it has little advantage as a legitimate currency.
Monday’s report comes as Goldman Sachs, the New York Stock Exchange and other institutions are preparing for bitcoin trading — while the U.S. Securities and Exchange Commission has found considerable fraud in offerings of digital tokens.
Crytocurrency exchanges have also recently been targets of cyberattacks. Last week, bitcoin values fell sharply after a South Korean exchange reported it was hacked.
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