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Buying bitcoins? Cryptocurrencies are like ponzi schemes: World Bank chief

While cryptocurrency technology has the potential to reshape global finance, concerns have been raised about its volatility and the potential for money laundering or other crimes

Shelly Hagan | Bloomberg 

Bitcoin
Photo: Reuters

The head of the World Bank compared to “Ponzi schemes,” the latest financial voice to raise questions about the legitimacy of digital currencies such as

“In terms of using or some of the cryptocurrencies, we are also looking at it, but I’m told the vast majority of are basically Ponzi schemes,” President said Wednesday at an event in Washington. “It’s still not really clear how it’s going to work.”

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The development lender is “looking really carefully” at blockchain technology, a platform that uses so-called distributed ledgers to allow digital assets to be traded securely. There’s hope the technology could be used in developing countries to “follow the money more effectively” and reduce corruption, Kim said.

The value of soared in 2017 before slumping, with losing nearly two-thirds of its value since mid-December.


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While has the potential to reshape global finance, concerns have been raised about its volatility and the potential for money laundering or other crimes.

In a speech this week, Bank of International Settlements chief Agustin Carstens said there’s a “strong case” for authorities to rein in digital currencies because their links to the established financial system could cause disruptions. Federal Reserve Chair has said that “governance and risk management will be critical” for

First Published: Thu, February 08 2018. 11:36 IST
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