The former finance minister of Indonesia, Muhamad Chatib Basri, told CNBC that central banks should think about issuing their own cryptocurrency to reduce Bitcoin’s threat to global financial stability.
Bitcoin is having the worst year start in its history after a series of hacking attacks, crypto advertisement bans by tech giants, and a regulatory clampdown around the world. To avoid cryptocurrency risks, Basri recommends that investors focus on blockchain rather than on Bitcoin.
“If you look at this cryptocurrency, we can see the risk to financial stability because if you are talking about Bitcoin there is no underlying asset,” he said.
“What the central banks can do perhaps is try to get into the technology behind the Bitcoin, like the blockchain – they can monitor the process.”
After reaching the lowest level since November 23, 2017, Bitcoin recovered some losses and was fluctuating at about $7,158 at the time of writing. Despite the relief, Basri still considers Bitcoin a threat to financial stability.
“If there is a bubble then Bitcoin may have an impact on financial stability in many countries but there is no way the regulators, even central banks, can ban it,” he added.
Instead, Basri suggests that central banks issue their own digital currency, which would be easily monitored and legal. In this way, Bitcoin’s impact on the global financial stability would be reduced.
When asked how he saw cryptocurrencies ten years from now, Basri replied they are here to stay. He stressed that the current bearish trend is only temporary and represents an adjustment amid increased regulation adopted in different parts of the world.
In February, Basri called for a national digital currency issued by the central bank of Indonesia to compete with Bitcoin rather than ban it.
“So, [Bank Indonesia] needs to create something that can be monitored. I understand BI’s concern over Bitcoin […] as there is no underlying asset. But we cannot ban it,” he said at the time.
This article appeared first on Cryptovest
