Bitcoin has had a tremendous week, by any accounting, but Stefan Ingves, governor of Sweden’s Riksbank and the chairman of global regulators at the Basel Committee, has warned investors that the risk may be huge. According to the regulator, investing in Bitcoin is a dangerous endeavor.
The banking regulator stressed that investment in things that rise wildly is generally not a good idea, given the nature of investment generally. He said that the future of cryptocurrencies and the traditional banking world are not particularly linked, and made it clear that legacy banking was not a thing of the past. He said:
“Let me also stress that sometimes there is a bit of a hype when people talk about fintech, thinking that old-fashioned banking is going to go away. But I don’t think that is going to happen because regardless of the technology available, in most countries we have had banks for hundreds and hundreds of years and most likely it is going to continue that way.”
Of course, many, both in and out of the crypto market, see Ingves’s comments as nearsighted and biased, given his current status as a banker. Mark Yusko, for example, recently suggested that bankers should be scared of Bitcoin and that the price had only just begun to rise.
Other industry insiders concur, though also speculating that governments will continue to enforce new regulation on the cryptocurrency market. Particularly given the anonymity made possible through Bitcoin and others, it seems likely to some that governments will certainly seek greater levels of control. According to Ted O’Neill – Founder & Chairman of Narrative:
“We will continue to see governments become more involved from a regulatory standpoint. Bitcoin and other cryptocurrencies are a threat to the status quo. As crypto continues to gain traction, it will force all governments to assess the net impact. The biggest long-term threat is to the tax systems; the unparalleled control that people have with crypto makes it harder to track the transaction flow, and thus many governments will want to regulate (and control) these transactions as much as possible.”