6 ms·

Crypto has ‘amplified financial risks’ in emerging markets, central banks warn

55 points by Terretta 3y ago

Terretta 3y ago
https://archive.is/iyExK https://archive.is/iyExK
thrill 3y ago
I think the better word is clarified.
justrealist 3y ago
There's no data here... it's just a statement by bankers about banks. It's going to get upvoted entirely for the sentiment, but there's literally no new info here.
- abwizz 3y ago
  don't discount the lucky 10k so easily https://xkcd.com/1053/ https://xkcd.com/1053/
monero-xmr 3y ago
The article is devoid of substance. > All but two of the top 20 countries for crypto adoption are emerging markets, with countries like Venezuela, El Salvador and Nigeria becoming test beds for whether cryptocurrencies could offer a balm to countries ravaged by inflation and depreciating official currencies. There is a reason why people in Venezuela and Argentina flock to currency different from the wildly inflating fiat currency. > But the central banks group said that crypto assets increased financial stability risks in emerging market economies, as a weaker rule of law could make it harder to enforce contracts, while “inconsistent enforcement can create confusion and raise market risk”. These countries already have weak rule of law. If anything, smart contracts could be an improvement where presidential candidates are assassinated and narco terrorists bribe judges and police.
- jacobwilliamroy 3y ago
  I always thought the word "contract" in crypto was more of a metaphor than an actual contract. Kind of like how filesystems have "folders" even though the "folders" in a filesystem aren't anything like real folders at all.
  - landemva 3y ago
    The "contract" is just a computer program with the bytecode deployed on-chain.
- troupo 3y ago
  > If anything, smart contracts could be an improvement where presidential candidates are assassinated and narco terrorists bribe judges and police. You cannot fix social issues with limited code dealing with digital assets only written in esotheric programming languages so impenetrable that their own authors and multiple audits routinely miss trivial exploitable issues.
- nicholasbraker 3y ago
  So to evade hyperinflation one uses an asset which is more volatile, and in the case of BTC, is deflationary by nature. Which as in _investment_ is fine, but as a means of payment not, as the whole essence of a _sensible_ amount (2-3%) of inflation is a driver for economic growth. The problem with this statement is that using one evil to escape the other which doesn't make sense. Countries with a weak rule of law shouldn't (monetary wise) not be made weaker by using a volatile and highly (let's not deny it..) manipulative asset.
  - LatteLazy 3y ago
    Bitcoin has been very stable against the USD for a while now. And that's just bitcoin, stable coins are more reliable. And of course inflation only robs holders, at least volatility goes in your favour half the time. I also would not call it an investment: there is no reason to expect prices to rise. Bitcoin does not grow in the way a company can (making shares an investment) or pay interest like a bond. It's at best a speculative asset, like maybe gold?
derefr 3y ago
Cryptocurrency is, in a sense, a bottom-up tool against top-down state control of a finance system. This is not strictly a good or a bad thing; just a thing. If the people of a country have a "common law" underlying their bottom-up interactions, that already works on its own as a basis for a productive and growing economy — but a totalitarian state has imposed top-down laws that interfere with that productive economy — then crypto will help "route around" that totalitarian state, and thereby help the economy. If the people of a country include a large criminal element that would forcefully put themselves in the position of rentier middleman, extracting all margin from interactions in the economy for themselves and so starving the country of growth capital — and the state has imposed top-down laws that interfere with that rent-extraction, in an attempt to get the economy going in the right direction — then crypto will help "route around" that well-meaning state, and thereby reinforce the criminal capture of the economy.
- timeagain 3y ago
  > If the people of a country include a large criminal element that would forcefully put themselves in the position of rentier middleman, extracting all margin from interactions in the economy for themselves and so starving the country of growth capital Isn’t this the business plan of every failed/fraudulent crypto exchange?
  - eniotna 3y ago
    Keyword here is "forcefully", when you use an exchange, you willingly do so.
  - derefr 3y ago
    I mean "forcefully" literally. You voluntarily enter into a relationship with Uber, AirBnB, etc; and other companies can enter the same market. You don't voluntarily enter into a relationship with the guy who comes into your shop demanding protection money. Nor with the gang who corners the market for e.g. bananas, by "negotiating" with both the producers and the large commercial buyers at gunpoint.
- klntsky 3y ago
draw_down 3y ago
[dead]
yieldcrv 3y ago
capital routes around capital controls news at 11
rich_sasha 3y ago
It feels like BIS is confused here, and I say that as a crypto minimalist. Yes, ther are many scams in crypto, but the basest of things, sending magic beans between people, is fairly solid. Not without risks, but if you have no alternative, it's pretty good IMHO. Saying crypto is bad because of scams is like saying dollars are bad because of Nigerian scammers. Can't trust these grannies with their dollars...
cushpush 3y ago
No undo button results in lots of scams, you don't say.
appleflaxen 3y ago
The institution that controls the currency will always fight any alternative currency. That's one big piece of the value proposition of Bitcoin: it is governed by user consensus, not political power.
- iamericaa 3y ago
  [flagged]

55 points by Terretta 3y ago

Terretta 3y ago

https://archive.is/iyExK https://archive.is/iyExK

thrill 3y ago

I think the better word is clarified.

justrealist 3y ago

There's no data here... it's just a statement by bankers about banks. It's going to get upvoted entirely for the sentiment, but there's literally no new info here.

abwizz 3y ago
don't discount the lucky 10k so easily https://xkcd.com/1053/ https://xkcd.com/1053/

monero-xmr 3y ago

The article is devoid of substance. > All but two of the top 20 countries for crypto adoption are emerging markets, with countries like Venezuela, El Salvador and Nigeria becoming test beds for whether cryptocurrencies could offer a balm to countries ravaged by inflation and depreciating official currencies. There is a reason why people in Venezuela and Argentina flock to currency different from the wildly inflating fiat currency. > But the central banks group said that crypto assets increased financial stability risks in emerging market economies, as a weaker rule of law could make it harder to enforce contracts, while “inconsistent enforcement can create confusion and raise market risk”. These countries already have weak rule of law. If anything, smart contracts could be an improvement where presidential candidates are assassinated and narco terrorists bribe judges and police.

jacobwilliamroy 3y ago
I always thought the word "contract" in crypto was more of a metaphor than an actual contract. Kind of like how filesystems have "folders" even though the "folders" in a filesystem aren't anything like real folders at all.
- landemva 3y ago
  The "contract" is just a computer program with the bytecode deployed on-chain.
troupo 3y ago
> If anything, smart contracts could be an improvement where presidential candidates are assassinated and narco terrorists bribe judges and police. You cannot fix social issues with limited code dealing with digital assets only written in esotheric programming languages so impenetrable that their own authors and multiple audits routinely miss trivial exploitable issues.
nicholasbraker 3y ago
So to evade hyperinflation one uses an asset which is more volatile, and in the case of BTC, is deflationary by nature. Which as in _investment_ is fine, but as a means of payment not, as the whole essence of a _sensible_ amount (2-3%) of inflation is a driver for economic growth. The problem with this statement is that using one evil to escape the other which doesn't make sense. Countries with a weak rule of law shouldn't (monetary wise) not be made weaker by using a volatile and highly (let's not deny it..) manipulative asset.
- LatteLazy 3y ago
  Bitcoin has been very stable against the USD for a while now. And that's just bitcoin, stable coins are more reliable. And of course inflation only robs holders, at least volatility goes in your favour half the time. I also would not call it an investment: there is no reason to expect prices to rise. Bitcoin does not grow in the way a company can (making shares an investment) or pay interest like a bond. It's at best a speculative asset, like maybe gold?

derefr 3y ago

Cryptocurrency is, in a sense, a bottom-up tool against top-down state control of a finance system. This is not strictly a good or a bad thing; just a thing. If the people of a country have a "common law" underlying their bottom-up interactions, that already works on its own as a basis for a productive and growing economy — but a totalitarian state has imposed top-down laws that interfere with that productive economy — then crypto will help "route around" that totalitarian state, and thereby help the economy. If the people of a country include a large criminal element that would forcefully put themselves in the position of rentier middleman, extracting all margin from interactions in the economy for themselves and so starving the country of growth capital — and the state has imposed top-down laws that interfere with that rent-extraction, in an attempt to get the economy going in the right direction — then crypto will help "route around" that well-meaning state, and thereby reinforce the criminal capture of the economy.

timeagain 3y ago
> If the people of a country include a large criminal element that would forcefully put themselves in the position of rentier middleman, extracting all margin from interactions in the economy for themselves and so starving the country of growth capital Isn’t this the business plan of every failed/fraudulent crypto exchange?
- eniotna 3y ago
  Keyword here is "forcefully", when you use an exchange, you willingly do so.
- derefr 3y ago
  I mean "forcefully" literally. You voluntarily enter into a relationship with Uber, AirBnB, etc; and other companies can enter the same market. You don't voluntarily enter into a relationship with the guy who comes into your shop demanding protection money. Nor with the gang who corners the market for e.g. bananas, by "negotiating" with both the producers and the large commercial buyers at gunpoint.
klntsky 3y ago

draw_down 3y ago

[dead]

yieldcrv 3y ago

capital routes around capital controls news at 11

rich_sasha 3y ago

It feels like BIS is confused here, and I say that as a crypto minimalist. Yes, ther are many scams in crypto, but the basest of things, sending magic beans between people, is fairly solid. Not without risks, but if you have no alternative, it's pretty good IMHO. Saying crypto is bad because of scams is like saying dollars are bad because of Nigerian scammers. Can't trust these grannies with their dollars...

cushpush 3y ago

No undo button results in lots of scams, you don't say.

appleflaxen 3y ago

The institution that controls the currency will always fight any alternative currency. That's one big piece of the value proposition of Bitcoin: it is governed by user consensus, not political power.

iamericaa 3y ago
[flagged]