According to a press note released by the central bank of Argentina there are some inherent risks involved with Bitcoin and for that all users are warned about it. Coming from Argentina’s Central Bank, the warning reminds the readers about similar warnings issued by the central banks of China, India and various European countries.
The central bank of Argentina, headed by Juan Carlos Fabrega, believes that the warnings issued by various financial regulators regarding Bitcoin and other digital currencies is not exaggerated and even it shares the apprehensions. The bank says that due to the non-issue of digital coins by a central government, Bitcoin cannot be considered legal tender.
Apart from being a currency that is not being issued by a central government; Bitcoin is also has a dubious track record wherein it has been blamed that it is being used in criminal activities.
Money Laundering Using Bitcoin
Like various other governments around the world, even the Argentinian national bank thinks that though there is still no consensus on the nature of these assets, various authorities have warned of possible use in money laundering operations and various types of fraud. For instance, Silk Road was a fine example of money laundering and contraband use of Bitcoin.
Apart from Bitcoins’ use in money laundering, another risk according to the national bank of Argentina is for civilians as it warns them that the exchange value of Bitcoin constantly fluctuating to extremes. It views that as the exchange value of Bitcoin may also incur losses to Bitcoin users, the government cannot protect as it does not consider it legal.
According to the Central Bank of Argentina the risks associated with transactions involving the purchase or use of virtual coins as payment, are supported exclusively by their users. Thus, dismissing Bitcoin in any capacity can be a mistake, especially with the financial crisis Argentina is in the middle of today.
It looks the opinions like risky investments in Bitcoin are widespread and the latest warning coming from the Central Bank of Argentina is just a confirmation of the same. For instance, across the United States, state regulators have been cautioning the people and merchants to stay away from Bitcoin.
A fundamental distrust is that without the government’s backing, Bitcoin cannot be considered a primary monetary unit. However, this is also a factor that distinguishes Bitcoin from fiat and makes it attractive among its supporters.
To contact the reporter of this story: Deepak Tiwari at firstname.lastname@example.org