IMF Compares Cryptocurrencies To Ponzi Schemes
The onslaught on digital currencies is unabating.
Despite the soaring popularity of many of them such as Bitcoin, Ethereum, Lytecoin, BTC etc, the blockchain technology continues to be rebuffed by financial authorities.
The World Bank has now become the latest global financial authority to warn against cryptocurrencies while comparing them to “Ponzi schemes”.
“In terms of using Bitcoin or some of the cryptocurrencies, we are also looking at it, but I’m told the vast majority of cryptocurrencies are basically Ponzi schemes,” World Bank Group President Jim Yong Kim said Wednesday at an event in Washington.
“It’s still not really clear how it’s going to work,” he added.
The World Bank is looking carefully at blockchain technology, a platform that uses so-called distributed ledgers to allow digital assets to be traded securely (its complicated stuff).
There’s hope the technology could be used in developing countries to “follow the money more effectively” and reduce corruption, Kim said.
The value of cryptocurrencies soared in 2017 before slumping, with Bitcoin losing nearly two-thirds of its value since mid-December.
While cryptocurrency technology has the potential to reshape global finance, concerns have been raised about its volatility and the potential for money laundering or other crimes.
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