According to the Bank for International Settlements (BIS) today, Bitcoin could "break down altogether" and is ultimately a risky investment.
According to a Bloomberg report today, the bank, which works as a bank for central banks, also stated that only the central banks should issue digital currencies.
Agustin Carstens, the BIS General Manager, was also cited saying in a speech at the Hoover Institution that Bitcoin becomes vulnerable to attacks as it approaches its maximum supply of 21 million coins.
Carstens has previously criticized Bitcoin. He described it in 2018 as a "combination of a bubble, a Ponzi scheme and an environmental disaster." Bloomberg also reported that Carstens said that stablecoins were troublesome because a private entity is responsible for supporting the asset.
On the other hand, the central banks were in a better position to use digital currencies, and the Bank for International Settlements was studying this. He was quoted as saying: "If digital currency is needed, it should be issued by the central bank."
Governments around the world are researching or trialing their own central bank digital currencies (CBDCs), which are essentially digital versions of the government's legal tender. Last year, the Bahamas began to launch CBDC, and China is piloting a digital yuan.