International banking chief Agustín Carstens doesn’t mince words when it comes to cryptocurrency, both when it comes to technological developments and economic pursuits.
Carstens has recently been appointed general manager of the Bank for International Settlements (BIS), the so-called “central banks’ central bank.” It’s no secret that Carstens is a vocal critic of cryptocurrency. Earlier this year, Carstens said that bitcoin is “a bubble, a Ponzi scheme, and an environmental disaster.”
He has even made a plea aimed at the “young people” largely involved with cryptocurrency: “Stop trying to create money!”
He said that even the esteemed scientist Isaac Newton tried but failed to create money out of nothing, and that young people should learn from Newton’s folly.
“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 said he was “concerned by the pace of technological progress” and urged young people (he emphasized “young people” several times throughout his speech) to devote themselves to pursuits that are better 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.”
Carstens insists that traditional banks are trustworthy and that there is no substitute for them in the current 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.
Just because he can’t imagine it, however, doesn’t mean that “young people” can’t.