Cryptocurrencies Are Ponzi Schemes, Says World Bank Head
The World Bank president on Wednesday compared cryptocurrencies to Ponzi schemes but had good things to say about blockchain technology.
It took long enough, but we finally have a comment from the head of the World Bank on cryptocurrencies, and we’re certainly not feeling the love.
Jim Yong Kim, the 12th leader of the World Bank, said the organization is “looking really carefully” at blockchain and is optimistic about the technology, noting that developing countries could leverage it to combat corruption.
However, he didn’t have the same upbeat attitude when it came to cryptocurrencies, as Bloomberg reports.
“In terms of using Bitcoin or some of the cryptocurrencies, we are also looking at it, but I am told the vast majority of cryptocurrencies are basically Ponzi schemes. It is still not really clear how it is going to work,” Kim said.
His words indicate he is basing his opinion on hearsay rather than an in-depth personal analysis of cryptocurrencies. Still, governments around the world will pay attention to what the leader of the World Bank has to say on this matter.
So far, we have seen that other organizations and national governments share the same uninspired attitude to these alternative forms of payments.
South Korea’s government, for example, has been discussing a ban on cryptocurrency exchanges for over a month. The country may not have reached a decision, but its leaders are sharply divided on the issue.
To the north, China decided to freeze all international cryptocurrency trades going through the country. This effectively wiped out legitimate activity in the market.
On the other hand, we have countries like Indonesia, where talk of a competing cryptocurrency has made it into government circles. State officials accept that it would be monumentally difficult and counter-productive to have an outright ban on cryptocurrencies, so they perceive as their best hope the creation of something that could attract more investors and help maintain some semblance of order.
It would be interesting to see what kind of position the World Bank would adopt on cryptocurrencies after it has had a chance to study them further. Kim’s statement suggests that the organization is just starting to explore the phenomenon.