Japan legalized Bitcoin and the price has begun to skyrocket, but some German bankers are still warning people about using the new currency. In a May 5 news article, a board member of Bundesbank decried the use of bitcoin as risky and ill-advised.
The board member said, “From our point of view, bitcoin is not a suitable medium for storing values. This shows a simple view of the very fluctuating course development.”
This comment is not surprising coming from the German banking gentry, as most Germans prefer cash over debit cards. A news article by Handelsblatt Global cited a recent survey,
“In fact, Germans – and their German-speaking Austrian neighbors – are more likely to carry cash around than any other European country. They’re also less willing to imagine a day when they can get along without it, a new survey released Wednesday has found.”
Question of Bitcoin’s ‘Fluctuating Course’
The Bundesbank board member was specifically concerned about the “volatile” nature of bitcoin, but his comment resonates with fear, uncertainty, and doubt. In reality, the volatility level of bitcoin has declined over the years.
Justin Connell, writing for Bitcoin.com, stated in an article that bitcoin volatility has fallen since 2011. According to the charts, bitcoin has seen an ebb in volatility when compared to other currencies such as the Euro, Bristish Pound, and Japanese Yen. Connell said,
Bitcoin’s volatility has fallen, now sitting at approximately 5%. For comparison, gold volatility averages approximately 1.2% and major fiat currencies between 0.5% and 1.0%.
Connell finished the article by saying bitcoin transactions have significantly increased throughout the currency’s lifespan, along with the price, yet volatility has not drastically surged.
No Prohibition of Bitcoin in Germany…Yet
Even though German bankers erroneously take issue with bitcoin volatility, they are still not hurrying to ban it. They see it as a useful means to transfer money so long as people do not violate money laundering regulations.
Currently, the banking board member views bitcoin as a niche product that does not threaten the global monetary system or German banking schemes. In other words, bankers give people permission to use bitcoin so long as laws are being followed and the digital currency does not threaten the status quo.
The news article said, “Users should not violate the rules on money laundering. Bitcoin also does not pose a threat to the financial system, at least as long as it remains a marginal phenomenon.”
Do you think German bankers will ever have a change of heart? Let us know in the comments section below.
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