Central banks have no love for Bitcoin (BTC) and other cryptocurrencies. While some good deeds are taking place, the general sentiment is presumably negative. The applicability of cryptocurrencies and the decentralized technologies that characterize them are questioned, mainly by banks. Central banks feel the need to control the Bitcoin (BTC) and even proposed several times a central body to put a real value on this cryptocurrency.
Bitcoin (BTC) Value Measurement
A lot of people and organizations are fighting to establish the real value of Bitcoin (BTC). A decentralized type of currency that is not issued or controlled by any central body presents many and varied challenges, but it also poses the dilemma of whether this type of currency can ever hold any real value.
For central banks, the fluctuation of the Bitcoin (BTC) price indicates its huge volatility, at least when compared to gold or other mainstream commodities.
Also, it’s obvious that gold is attracting more investors than BTC, but the crypto is still valuable, even more than gold, of course, against the USD.
The necessity for a central body to control the Bitcoin (BTC)
The lack of centralization of the Bitcoin (BTC) world is a frequent topic of discussion. More precisely, there is no central developer, firm, bank or governmental entity in charge of holding the leading digital currency in the world, at the moment.
But cryptocurrencies represent a very distinct and modern view of money. While central banks rely on people’s money to function and people rely on central banks to hold their cash, Bitcoin (BTC) and other cryptocurrencies don’t work that way, as there is no central body to control the holdings, the transactions. There is no central body to function on cryptocurrencies.
That is the first reason why central banks are afraid of BTC and cryptocurrencies.
Even more, some specialists go as far as stating that Bitcoin (BTC) is a real threat to traditional banking because it offers an alternative characterized by decentralization and freedom. But, unfortunately, blockchain technologies on which the cryptos rely must mature more before becoming a viable alternative to traditional banking.
However, in the end, keep in mind that another reason why central banks fear Bitcoin (BTC) and cryptocurrencies is that these digital assets are going on the right track to becoming viable alternatives to the traditional banking system.