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South America: central banks in Peru and Brazil warn against the bitcoin bubble

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Brazilian and Peruvian central banks warned on Wednesday (Dec. 13) about the potential risks of virtual currencies, as Bitcoins.

Bitcoin is a virtual currency not linked to governments or banks. The crypto-cash was created in 2009 by an anonymous programmer identified only by the pseudonym Satoshi Nakamoto. Bitcoin and considered the “first decentralized digital currency”.

“Cryptocurrencies, in the way they are today, with this dizzying escalation … with nothing to regulate, pose risks that the central bank issued a notice about them,” said Ilan Goldfajn, president of the Central Bank of Brazil (BCB), he said at a press conference.

In a statement issued at the end of November, the BCB warned of the possible negative consequences of digital currencies.

Cryptocurrencies does not have the same guarantees as sovereign currencies, nor are they anchored in real assets of any kind, which put all the risks in the hands of their owners, “the statement said.

“Its value comes only from the trust that individuals place in their issuers,” he continued.

Goldfajn said on Wednesday that Bitcoin is a “typical bubble” that regulatory authorities “should not encourage.”

“That’s not something we should support,” he added.

Also on Wednesday, Julio Velarde, president of the Central Reserve Bank of Peru, said that bitcoins as the highest figure represents a very high risk.

Velarde told the press that he personally was not going to invest in that currency, since he perceived that he had no security, although the Chicago Stock Exchange began accepting bitcoins, sending his value shot.