First the ECB, then the Fed, and now the Dutch central bank have come out and explicitly warned of the dangers of virtual currencies like Bitcoin and Litecoin. Their explicit statement this morning, raising questions about deposit guarantees, central issuer responsibility, and volatility do their best to inform potential users (or traders) of the alternative currency that it is the devil incarnate. It seems, despite the mainstream media’s guffawing at the swings and outrageous fortune in the market’s early days, that the powers that be see these crypto-currencies as anything but benign.
Via Dutch Central Bank,
Consumers should be aware of the risks of virtual currency
The emergence and growing popularity of virtual currencies (like bitcoin, litecoin, etc.) are followed by the Dutch Central Bank (DNB) with attention.
The developments around virtual currencies go fast.
At present the state of affairs as follows: virtual currencies fall outside the scope of the Act on Financial Supervision. DNB thus no monitoring of these virtual currencies. Nor, she oversees companies acting herein.
DNB suggests that consumers should be aware of this and will have to realize the risks they run when they buy currencies like bitcoin.
The exchange rate is volatile and there is no central issuer which may be held liable.
Also, the deposit guarantee scheme does not apply.
If this small market cap vicrtual currency is such a “gimmick” as some have said, why are the world’s central banks so afraid?
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via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/KAW47z6NWk0/story01.htm Tyler Durden