Bitcoin Has ‘Few Redeeming Public Interest Attributes,' As Per BIS

Kavya  |  Jun 25, 2021

In a study, the BIS (Bank for International Settlement) condemned Bitcoin for its high energy usage, redeeming public interest attributes, and role in money laundering.

The BIS Targets Bitcoin And The Larger Crypto Sector

In its Annual Economic Report, the Bank for International Settlements (BIS) slammed Bitcoin, stating that it offers minimal benefits.

In a section of the research released before its full release on June 29, the BIS asserted that cryptocurrencies are “speculative assets rather than money,” noting their role in “money laundering, ransomware attacks, and other financial crimes.”
Furthermore, the BIS singled out Bitcoin for its high energy consumption, which has already been shown to be larger than other countries' yearly energy use. “When considering its inefficient energy effect, Bitcoin, in particular, has few redeeming public interest attributes,” according to the research.

In addition to rejecting traditional cryptocurrencies like Bitcoin, the research also targeted stablecoins, which are crypto-assets like Tether that promise to be backed by fiat money.

Stablecoins, according to the research, “attempt to import credibility by being backed by genuine currencies,” but “these are only as good as the governance behind the promise of backing.”

Tether, the crypto market's largest stablecoin, disclosed its reserves in May for the first time since 2014. After stating that Tethers were 100% backed by cash, it was discovered that fewer than 3% of Tether's reserves were stored in cash.

The BIS States That Bitcoin Have Few Redeeming Public Interest Attributes

The BIS research comes only weeks after the bank adopted a firm position against institutions that wish to keep digital assets.

On June 10, the BIS issued a consultation document in which it stated that the ongoing rise of cryptocurrencies may increase the danger of financial instability.

As a result, the bank implemented a regulation requiring banks to set aside sufficient capital to offset any losses incurred as a result of holding Bitcoin.

The decision was viewed as conservative at the time, and it threatened to undermine hopes for Bitcoin's widespread adoption.

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