Is it true that crypto is a threat to central banks?

[Suba]

Since Bitcoin became popular, the central bank of a country will treat cryptocurrency differently, there are countries that allow crypto as a means of payment, there are also countries that prohibit crypto completely, and will even fine you if you are found to have crypto. There are also countries that treat crypto like commodities, but do not allow it as a medium of exchange. There are also some countries that restrict regulations and impose high taxes just to reduce the circulation of crypto in their country.

 

[King Belieal]

Central banks make monetary policies like interest rates fixing which helps to control the economy. With crypto investments, that power of control is taken away from them as interest on crypto is not subject to the policy of any central bank of any country.

 

[Suba]

Central banks make monetary policies like interest rates fixing which helps to control the economy. With crypto investments, that power of control is taken away from them as interest on crypto is not subject to the policy of any central bank of any country.

You are right, no one controls crypto, so their growth in a country will depend on the number of users. The more users there are, the more a country's fiat money will be sucked into crypto, so that their money circulation will decrease and of course this will disrupt their monetary stability, which is why many countries ban crypto, or at least impose high taxes to discourage crypto circulation.

 

[monster_masterpiece]

You are right, no one controls crypto, so their growth in a country will depend on the number of users. The more users there are, the more a country's fiat money will be sucked into crypto, so that their money circulation will decrease and of course this will disrupt their monetary stability, which is why many countries ban crypto, or at least impose high taxes to discourage crypto circulation.

The cryptocurrencies were built because for example to pay an external provider you need authorization from the central bank and this may still a lot of time to get the authorization and may the offer expire and the request for bank wire be rejected so crypto makes it easier to pay any user from the internet.

 

[Starmix]

In my country Central Bank rejected crypto and people engaging with crypto were advised to pay taxes. It was not elaborated why Central Bank does not back up cryptocurrency.

 

[Suba]

The cryptocurrencies were built because for example to pay an external provider you need authorization from the central bank and this may still a lot of time to get the authorization and may the offer expire and the request for bank wire be rejected so crypto makes it easier to pay any user from the internet.

That's right, one of the advantages of crypto is that it is easy to transfer without needing third party authorization. I also often buy web hosting and domains using crypto on Namecheap.

 

[magnus2022]

Cryptocurrency is a threat to central banks. Central bank controls monetary policies of a country and regulates monetary flow. But crypto is indirectly affecting currency regulations and makes it difficult for central bank to monitor monetary flows and values. Many financial institutions is truly afraid of crypto.

 

[neku]

Crypto payments are definitely a threat to conventional bank payments, since the transaction charges for some cryptos are definitely lower than bank charges. This makes crypto payment ideal for low value transactions.

 

[duniquefx]

There is some truth to this statement. On the one hand, the decentralization and independence of cryptocurrencies can be seen as a threat to the centralized control of money by central banks. On the other hand, it's worth noting that not all cryptocurrencies are created equal, and some are actually quite centralized. Additionally, central banks are starting to explore the use of central bank digital currencies (CBDCs), which could potentially coexist with cryptocurrencies.

 

[Suba]

There is some truth to this statement. On the one hand, the decentralization and independence of cryptocurrencies can be seen as a threat to the centralized control of money by central banks. On the other hand, it's worth noting that not all cryptocurrencies are created equal, and some are actually quite centralized. Additionally, central banks are starting to explore the use of central bank digital currencies (CBDCs), which could potentially coexist with cryptocurrencies.

You are right, basically the central bank created CBDC in an effort to stem the growth of crypto in its country, but in my country CBDC is less popular. So maybe it's just a complement to fiat money.

 

[Kirubel]

Yeah i think cryptocurrency is a threat to central bank and also it is threat to government security system, most illegal actions are done through cryptocurrency and the payments are maid through crypto coins.

 

[deucher]

I think it is beneficial for banks to cooperate with cryptocurrency because their customer base will increase accordingly, and it makes no sense to ban it in any way

 

[Suba]

In my country Central Bank rejected crypto and people engaging with crypto were advised to pay taxes. It was not elaborated why Central Bank does not back up cryptocurrency.

That is one of the frauds of government officials, even though as an institution/government regulation they prohibit crypto and impose high taxes, but personally many of them also have crypto which can be used to launder money.

 

[Webster]

Since Bitcoin became popular, the central bank of a country will treat cryptocurrency differently, there are countries that allow crypto as a means of payment, there are also countries that prohibit crypto completely, and will even fine you if you are found to have crypto. There are also countries that treat crypto like commodities, but do not allow it as a medium of exchange. There are also some countries that restrict regulations and impose high taxes just to reduce the circulation of crypto in their country.

Only in the minds of central banks because it directly affects currency matters.
Regular banks could give a flip about crypto in most cases.

 

[Xtynehappy]

Based on the fact that the cryptocurrency especially the bitcoin being said to be decentralized it can pose some dangers to the world central bank.

 

[riberet19]

Let's face it, nowadays they are so controlled that they are not, plus cryptocurrencies were created to be self-custody, and most users have them on exchanges, which is the same as a bank, so they are not a threat unless the majority of users change the way they use them.

 

[Min George]

The truth is that crypto takes financial control away from government and puts it in the hands of people. The central banks obviously won't be happy with that.

 

[Stardom22]

I think that the cryptocurrency venture is not a threat to the central banks for sure

 

[Fidelia]

The only reason that crypto is seen as a threat by central banks is because the central banks can't trace the persons behind transactions to freeze and unfreeze their accounts at will.

 

[Starmix]

That is one of the frauds of government officials, even though as an institution/government regulation they prohibit crypto and impose high taxes, but personally many of them also have crypto which can be used to launder money.

That could be possible. There are many crocs sector to sector pretending against crypto but the fact, they're investing on it.