Why Crypto Currencies Are A Threat To Humanity And Should Immediately Be Blocked

In a speech, Jon Cunliffe, Bank of England deputy governor stressed that crypto currency is not yet big enough to pose a threat to financial stability.

In an exclusive interview with CNBC’s Joumana Bercetche, Cunliffe told CNBC’s Joumanna Bercetche that he does not believe crypto’s speculative boom has crossed the line into financial instability risk.

Cryptocurrencies, such as Bitcoin and other digital currencies, rose in value at the beginning of the year and briefly became a $2.5 trillion market. Bitcoin advocates claimed that it offers an alternative method of storing value amid low-interest rates, which have made it difficult for savers to find yield.

The market has lost more than $1 trillion since May due to the volatility of cryptocurrencies. According to CoinDesk, bitcoin has been falling from its record high of nearly $65,000 reached in April to around $32,500 as of Wednesday.

The crypto industry has increasingly come under scrutiny from regulators. The Chinese government is cracking down on the industry, a series of measures that have negatively impacted investor sentiment in recent weeks.

The world’s largest cryptocurrency exchange, Binance, has been banned from operating in the United Kingdom following an investigation by the Financial Conduct Authority. As a result of failing to meet anti-money laundering regulations, Binance was among many exchanges that failed to register with the regulator.

Crypto Currency

Putting it bluntly, Conniffe said crypto speculation is limited to retail investors right now and people looking to invest should prepare for the possibility of losing all their money.

This raises concerns about investor protection. Speculative assets like these cannot be backed by guarantees. They aren’t large enough to pose a threat to financial stability, and they aren’t deeply integrated into the existing financial system.”

If we were to begin to see those links developing, if we were to start to see a wholesale move beyond retail into the financial sector more, then I think you might start to think about risk from that point forward,” he said.

In addition, the Bank of England official pointed out that it’s important to distinguish between speculative crypto assets like bitcoin, and fake assets such as stablecoins, which are backed by real assets.

Tether, for instance, has more than $60 billion worth of tokens in circulation, making it the largest stable coin in the world. For its currency to remain stable, it is supposed to be backed with 1 dollar, but so far tether has generated controversy over concerns it does not have enough reserves to justify its $1 peg.

Regulatory oversight of stablecoins is perceived to be important by Conliffe.

It’s probably important that the international community develops standards to be able to distinguish this type of product, but also regulatory standards for it, he said.

It comes at a time when several central banks around the world – including the Bank of England – are exploring digital currencies of their own in response to declining use of cash and growing interest in cryptocurrencies.

Indian Government reaction towards Crypto Currency

Crypto Currency

According to Reuters, India will propose a law banning cryptocurrencies, fining anyone trading or even owning such digital assets in the country, a blow to investors seeking to take advantage of the booming asset class.

An official who has direct knowledge of the plan said the plan would criminalize possession, issuance, mining, trading, and transferring cryptocurrencies, making it one of the world’s strictest regulations against cryptocurrencies.

As part of the government’s agenda, as of January, private virtual currencies, such as bitcoin, are planned to be banned, while a framework for an official digital currency is developed. Investors’ hopes were raised by government comments saying that officials might relax their rules and regulations on the thriving market.

In its place, the bill says cryptocurrency holders will have six months to liquidate cryptocurrencies before paying penalties, according to an official who did not want to be named since the bill’s contents are not publicly available.

Prime Minister Narendra Modi’s government holds a comfortable majority in parliament, so officials are confident that the bill will be passed into law.

India would become the first major economy to criminalize the possession of cryptocurrency if the ban comes into effect. It’s not even illegal to possess in China, where mining and trading are prohibited.

An email seeking comment was not immediately returned by the Finance Ministry.

The fear of ‘greed’ overshadows the worry of ‘panic’

The world’s most popular cryptocurrency, Bitcoin, reached a record high of $60,000 on Saturday, nearly doubling its value over the past year as the public’s acceptance for bitcoin payments has grown with the support of high-profile backers such as Tesla Inc CEO Elon Musk.

Even though the government has threatened to prohibit crypto-transactions in India, industry estimates show 8 million investors now own 100 billion rupees ($1.4 billion) in crypto-investments. The government has not officially announced any numbers.

Crypto-investor Sumnesh Salodkar said that the money is multiplying astronomically every month and that one shouldn’t sit on the sidelines and he even added that even  though people are panicking as a result of the potential ban, greed is driving their choices.

Crypto Currency

Crypto-exchange Bitbns has seen a 30-fold increase in registrations and money flow from a year ago, according to Gaurav Dahake, the company’s chief executive. Over 20,000 new users joined Unocoin, one of India’s earliest cryptocurrency exchanges, in January and February, despite fears of an impending ban.

According to ZebPay’s chief marketing officer, Vikram Rangala, ZebPay reported as much daily volume in February 2021 as it did in February 2020.

Financial minister Nirmala Sitharaman eased investor concerns this month, in response to remarks by Indian officials calling cryptocurrency a Ponzi scheme.

Nirmala Sitaraman, finance minister of India, told CNBC-TV18, “I can only tell you that we are not closing our minds, we are looking at ways in which experiments can happen in the digital world and cryptocurrency.” “We will take a very calibrated position.”

Reuters reported that a senior official told the news agency that the plan was to ban private crypto-assets and promote blockchain-a secure database technology that’s at the core of virtual currencies, but experts say it could revolutionize the way the world conducts international trade.

We don’t think there’s anything wrong with harnessing technology,” said the official, adding that the government’s actions would be “calibrated” in the penalties it imposes on those who do not liquidate crypto assets within the grace period.


As of 2019, a government-appointed panel has recommended the imprisonment of people mining, generating, holding, selling, transferring, disposing of, issuing and dealing in crypto currencies and the official declined to comment on whether the new bill would include jail terms along with fines, or to offer any further details, saying discussions were in the final stages.

After the Supreme Court of India overturned a central bank order banning banks from dealing in cryptocurrencies in March 2020, investors flooded into the market, taking cryptocurrency prices to new heights. In response to the ruling, the government was ordered to draft a law and to take a position.

It was again the Reserve Bank of India that expressed its concerns about cryptocurrencies last month, citing possible risks to financial stability. A central bank official told the official that they are also working on launching their digital currency. The bill also aims to encourage that development.

Though investors are in euphoria, they are aware that this boom is in jeopardy.

According to Naimish Sanghvi, who started trading digital currencies in the last year, “If the ban is official, we have to comply. Until then, I’d rather stack up and ride the wave instead of panicking and selling.”

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