Cryptocurrencies threaten central banks’ control over money supply — and officials study using their technology

I’ll bet they are studying it. Cryptos are a direct challenge to the central banks and it’s not like the banks are just going to capitulate and let Bitcoin take over the world. The Chinese for instance just moved against Bitcoin.

There have been other efforts from the powers that be to derail alternative currencies. There will be more efforts in the future. The central banks will probably crash cryptos if they can, if for no other reason than to send a message.

Whether a central bank induced crash happens or not will be very important. It’ll be an interesting next 12 months or so in this space.

(From The Japan Times)

The boom in cryptocurrencies and their underlying technology is becoming too big for central banks, long the guardian of official money, to ignore.

Until recently, officials at major central banks were happy to watch as pioneers in the field progressed by trial and error, safe in the knowledge that cryptocurrencies were dwarfed by the roughly $5 trillion circulating daily in conventional currency markets.

 But now, as officials turn an eye toward the increasingly pervasive technology, the risk is that they are reacting too late to both the pitfalls and the opportunities presented by digital coinage.

“Central banks cannot afford to treat cybercurrencies as toys to play with in a sandbox,” said Andrew Sheng, chief adviser to the China Banking Regulatory Commission and a distinguished fellow of the Asia Global Institute at the University of Hong Kong. “It is time to realize that they are the real barbarians at the gate.”

In this case however it is the “barbarians” who are the civilized ones.

Click here for the article.