Central banks in New Zealand, Canada and Brazil have expressed their views on cryptocurrencies

nRunaway Comment: In November, several central banks expressed their opinions on Bitcoin and cryptocurrency. RBNZ has issued a statement to its citizens about the basics of cryptocurrencies and their impact on monetary policy. The senior vice president of the Bank of Canada said the cryptocurrency is an asset or a security, not a currency. Brazil’s central bank also warned investors in November about cryptocurrencies. However, there is no plan for the regulation of cryptocurrencies for the time being.n
nTranslation: Inan
The Reserve Bank of New Zealand does not consider crypto-currency to be a viable threat to mainstream financial institutionsn


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The Reserve Bank of New Zealand (RBNZ) published an article on cryptocurrencies. The 44-page document aims to “increase public understanding of these technologies, highlight some of the risks involved in using cryptocurrencies, and discuss some of the potential impact these technologies have on consumers, the financial system, monetary policy and financial regulation. The document also details the basics and history of cryptocurrencies and provides definitions of some of the terms in the industry.n
The document states:n
n”Encrypting money expands the mechanisms by which people can trade with each other and increases the competitive pressure on payment system providers.”n
nHowever, RBNZ said these “new payment mechanisms are unlikely to completely replace the traditional payment system” due to the “relatively small volume” of transactions using cryptocurrencies. The paper also highlights “the incompatibility of the anonymity of cryptocurrencies with the disbursement of credits”, arguing that this would prevent cryptocurrencies from posing a threat to many of the traditional functions of financial institutions.n
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Canada treats encrypted currency as an asset or a security, not as a currencyn
In early November Carolyn Wilkins, senior vice president of the Bank of Canada, said “the so-called cryptocurrencies are not really currencies.” Wilkins said in an exchange with Bloomberg:n
n”If this is an asset or a security in the standard currency theory, it should be treated as an asset or as a security, and in fact it is what Canada does.”n
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Carolyn Wilkinsn
When asked about the ICO, Wilkins replied:n
n”I’m not a securities regulator and the Bank of Canada has no position to comment on any specific ICO, but to me it looks more like securities than currency and should be regulated.”n
nWilkins also expressed his passion for blockchain technology, adding:n
n”The distributed ledger technology that holds cryptocurrencies is promising because it offers the opportunity to increase efficiency in financial markets and elsewhere that can truly benefit market participants, businesses and families.”n
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Brazil’s Central Bank warns of the risks posed by the so-called custody and trading of virtual currenciesn


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The warning underscored the lack of protection for cryptocurrencies in cryptocurrencies, noting that virtual currencies “are not issued or guaranteed by any monetary authority.” Brazil’s central bank said:n
n”The purchase and custody of virtual currency” can expose investors to “immeasurable risks, including the possibility of losing all capital invested.”n
nAlthough the warning described the situation as grave, it also stated that “the international community has not yet decided on the need to regulate cryptocurrencies,” adding:n
n”In Brazil, for the time being, no significant risks to the country’s financial system have been observed.”n

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