LONDON — Cryptocurrencies are being used to evade laws and should face more regulation, according to the general manager of the Bank for International Settlements (BIS).
Many digital coins are “used to do some arbitrage, or to circumvent some regulations,” Agustin Carstens told CNBC. He added that laws against money laundering and the financing of terrorism were “absent in many applications of some cyber currencies.”
Bitcoin and other virtual currencies have seen huge gains over the last year, as investors looked to diversify their holdings in the coronavirus pandemic. Bitcoin bulls view the token as a sort of “digital gold,” claiming it can act as an inflation hedge in times of economic crisis and massive stimulus, CNBC said.
However, cryptocurrencies have also gained a reputation for their involvement in illegal activities. They are pseudonymous, making it harder to track down who is making transactions. Earlier this year, U.S. Treasury Secretary Janet Yellen said the government would need to “curtail” the use of crypto for criminal transactions, CNBC noted.