Bitcoin prices have crashed around 10 percent in India with a smaller dip globally following proposals for a far-reaching ban on private cryptocurrencies. Further criticisms of the token also came from the IMF this week. Reacting to announcements that El Salvador planned to build a Bitcoin city funded by the cryptocurrency the IMF warned it should “not be used as legal tender” due to “high volatility” and risks to financial stability. El Salvador has proved a champion of Bitcoin adopting it as legal tender.
Sales Trader at digital asset broker GlobalBlock Marcus Sotiriou commented: “If ever there was any doubt about the IMF not being a fan of Bitcoin, that can be dismissed now as this rhetoric clearly shows how they view the digital asset and are in no way pleased to see countries adopting it.”
However he cautioned there was little the IMF could do “with the overall digital asset market now valued at near $3trillion and demand for the asset class worldwide continuing to increase”.
Another Sales Trader at GlobalBlock, Freddie Williams, was also sceptical how much impact the moves in India might have.
Mr Williams said: “This is not the first time, and certainly won’t be the last time that a country has proposed a bill to ban cryptocurrencies.
“We have seen this multiple times with China, and the space has continued to grow with mounting institutional interest becoming more and more prominent in the space.”
Even if countries turning their backs on cryptocurrencies doesn’t have a major impact on the currencies themselves there are warnings it could come back to haunt those implementing bans.
Speaking to Express.co.uk CEO of investment site ADVFN Clem Chambers warned countries such as China and India in fact risked being left behind by not taking advantage of cryptocurrencies.
Comparing the situation to France’s scepticism of the industrial revolution Mr Chambers explained “people in government tend to look down their noses at new technology” adding that crypto had become the “rock and roll” of younger generations.
He predicted countries “would eventually start to get it” referencing the ability of cryptocurrencies to generate capital with $2.5tr (£1.87tr) of value having been created “out of thin air”.
Mr Sotiriou also pointed out the growing adoption of cryptocurrencies elsewhere by both businesses and other countries.
Citing the recent hire of 100 people by Citigroup for its crypto division he added: “Giants like Citi integrating crypto into their services adds significant credibility to the industry.
“I think the biggest banks in the world adopting cryptocurrency will create a snowball effect for other institutions to get on board.”
UK releases 1.5m barrels of oil [ANALYSIS]
‘Huge reality check coming’ for retirees with a mortgage [REVEAL]
Classic cars being re-imagined as online NFT artworks – ‘it’s special’ [SPOTLIGHT]
Australian regulator the Securities and Investments Commission recently said: “Crypto is on our doorstep, here and now, and being driven by extraordinary consumer and investor demand. The implications for consumers are potentially huge.”
Mr Sotiriou said this sort of recognition meant the IMF’s stance “may fall on deaf ears”.
Mr Chambers admitted we would likely see regulation increase on cryptocurrencies though, saying risks such as hacking mean it “can’t end up in anarchy”.
He explained: “Regulators come in and turn the dial to more regulation.
“There is a point on the dial of the optimal place to be”.
Credit: Source link