The Czech National Bank (Česká Národní Banka) recently published a press release addressing bitcoin and cryptocurrencies. The document addresses the popularity of bitcoin in Prague and the Czech Republic and, discusses whether blockchain based currencies pose a threat to the traditional banking system. The CNB argues that fiat currencies comprise better currencies than cryptos as a result of price stability.
The press release is titled “Don’t be afraid of bitcoin”, and seeks to deal with the popular assertions relating to the potential threats that bitcoin and cryptos could create to existing financial systems.
The document starts by stating that “Prague is home to a robust community of cryptocurrency supporters and users.” The statement then now turns to “questions regarding whether institutions such as the Czech National Bank should be afraid of bitcoin…. And of their power to marginalise traditional money.”
The Czech National Bank clearly states that there “is no reason for banks to fear” crypto. It looks like they still consider its adoption to be “negligible in its size and scope”, arguing that “[…] transactions using bitcoin worldwide amount to only 16% of the electronic transactions conducted in the Czech koruna, a currency used by just 10.5m people.”
This press release argues that bitcoin is not a suitable mainstream currency due to its “constantly changing price”. Even Describing it as “inherently volatile”.
Do you agree about the future of bitcoin as a mainstream currency? Feel free to give us your thoughts in the comments section below!