The emerging digital currency “is a problematic scheme,” according to Mihkel Nommela, who heads the central bank’s payment and settlement systems. “All risks are assumed by the user, who has no one to turn to for help.”
The call for caution comes amidst a slew statements from central banks around the world echoing similar sentiments, such as the currency’s volatility, susceptibility to theft, and potential for use as a money-laundering tool.
“All in all, virtual currency schemes are an innovation that deserves some caution, given the lack of any guarantees and responsible parties to back them in the longer term or evidence that this isn’t just a Ponzi scheme,” continued Nommela.
Another official at the bank, Vilius Sapoka said that “Such currencies are created and managed by people or groups that nobody supervises,” referring to Bitcoin’s lack of a central authority (by design, of course). “So there’s a very big risk that the ‘creators’ could disappear with people’s money.”
The Central Bank makes the assumption that “virtual money” will expand in Estonia, and will continue monitoring it. (via Bloomberg)