“Those crazy kids and their bitcoins, when will they ever learn?”
No, that’s not a direct quote, but it more or less sums up international banking chief Agustín Carstens’ thoughts on cryptocurrency, both as a technological development and an economic pursuit.
Carstens, the newly-christened general manager of the Bank for International Settlements (BIS) -- the so-called “central banks’ central bank” -- is on record as one of cryptocurrency’s fiercest critics. Earlier this year, for instance, he said that bitcoin is “a bubble, a Ponzi scheme, and an environmental disaster.”
Speaking recently in an interview with Swiss German-language newspaper Basler Zeitung, Carsten repeated that criticism -- verbatim -- after which he made an earnest plea to the “young people” promoting it: “Stop trying to create money!”
Even legendary scientist Isaac Newton tried -- and failed -- to create money out of nothing, he said, and young people should learn from his mistake.
On second thought, it’s worth quoting Carstens' translated remarks at length:
“Glance back into the past and you will see that creating gold or money from nothing has been a regular obsession. It never worked. Even the great physicist Isaac Newton was at one point in his life obsessed by alchemy and the idea of making gold. He was very successful in a number of fields, but in this one he failed. Newton ended up as head of the British Mint. Why? Because he could detect at once if a coin was counterfeit. After he failed in his attempt to make gold, he switched sides and sent counterfeiters to prison. So my message to young people would be: Stop trying to create money!”
The BIS chief, who added that he is "concerned by the pace of technological progress," advised young people to devote their efforts to better pursuits, rather than an asset class that does "not fulfill any of the...purposes of money."
“Young people should use their many talents and skills for innovation, not reinventing money,” he concluded. “It's a fallacy to think money can be created from nothing.”
Elsewhere in his remarks, Carstens argued that central banks are "trusted" and that, at least right now, there is no viable substitute for their role in the world economy. "I can't imagine something coming along any time soon that would be more efficient and generate the same level of trust," he said.
It seems that the "young people," however, disagree.
Featured image from Flickr/International Monetary Fund