No Surprise: Central Banker Opposes Cryptos

by Marvin Dumont

Last week, European Central Bank (ECB) executive board member Benoît Cœuré said that Bitcoin (BTC) is “the evil spawn of the financial crisis” in a speech given at a payments conference in Basel, Switzerland. “[Bitcoin] was an extremely clever idea. Sadly, not every clever idea is a good idea…. I believe that Agustín Carstens [general manager of Bank for International Settlements] summed its … problems up well when he said that bitcoin is a combination of a bubble, a Ponzi scheme, and an environmental disaster.”

The Bank for International Settlements (BIS) is a bank for 60 central banks around the world. The BIS represents the old order and does not consider cryptocurrencies a reliable form of money.

In a June 2018 report, BIS’s authors said that “decentralized cryptocurrencies suffer from a range of shortcomings. The main inefficiencies arise from the extreme degree of decentralization: creating the required trust in such a setting wastes huge amounts of computing power, decentralized storage of a transaction ledger is inefficient and the decentralized consensus is vulnerable…. Ultimately, this points to the lack of an adequate institutional arrangement at the national level as the fundamental shortcoming.”

Central Banks may be pessimistic about cryptocurrencies but digital coins is seeing wider adoption globally, especially in inflationary economies such as Venezuela, Turkey, Argentina, Iran, Libya and others. Merchants and consumers want to preserve their purchasing power. And cryptos give them an alternative to sovereign fiats whose purchasing power central banks and governments have failed to preserve.

Apollo Foundation is developing an unregulatable and untraceable cryptocurrency that’s beyond the reach of third parties. Decentralized, peer-to-peer, trustless money has advantages over fiat. Middlemen such as banks are expensive, and the traditional ecosystem accepts fraud (such as credit card chargebacks) as an inevitable part of the financial system. Moreover, widespread unethical behavior can wreak havoc on the entire financial system, as what happened in 2008.

Apollo (APL) will be the most feature-rich crypto in the market, and give currency holders a way to participate in Web 3.0 token economy. APL will also give users much utility and privacy. For example, Hermes Blockchain will make possible lightning fast transactions that are private and secure. Hermes will reduce 10- to 30-second transactions to a mere 2–3 seconds by leveraging the latest innovations in blockchain.

For decades, central banks (such as U.S. Federal Reserve) have printed cash out of thin air. Thus, people’s trust in the fiat-based system has eroded. These centralized entities have also not been forthcoming with consumers and investors. Unnecessarily complex jargon such as “quantitative easing” obfuscate the nature of their cash-printing operation, and this leads to fiats’ erosion of buying power.

There are many types of cryptos, and each offers unique benefits and disadvantages. But one thing is certain: The $200 billion crypto market was spawned by the unethical practices of private and central banks as well as debt-ridden governments. Their bad behavior motivated rational consumers and investors to preserve their wealth by moving away from devaluing, debt-based fiats towards peer-to-peer, trustless money.