According to Bank of Spain governor Luis María Linde, people should have a cautious approach to cryptocurrencies, but says he still sees value in the underlying blockchain technology.
Linde gave a speech at a leaders meeting on the country’s financial sectors organized by Deloitte and two Spanish firms, the global move to cryptocurrency requires regulators that can encourage innovation and bring the risks under control. According to him, despite blockchain technology having interesting possibilities the technology is yet to mature and the accompanying risks such as cyber-attacks need measures to protect and processes customer data and assets.
In his speech, Linde stated:
“[Cryptocurrencies] have low acceptance as a means of payment, suffer extreme volatility, present multiple operational vulnerabilities and have been related to fraudulent or illicit activities in many cases.”
Linde believes that they currently present “more risks than benefits” calling them “those spurious novelties that do not provide significant improvements and that should be tackled as soon as possible,” during his speech.
Cryptocurrencies have low acceptance rates as a means of payment. For instance, most Bitcoin owners are reluctant to use cryptocurrencies given its rate of appreciation. This has made some digital coins such as Bitcoin to be seen as more of an asset than a currency.
In Spain, Bitcoin is not a legal currency although it is considered as a digital good. Its transaction is governed by barter rules provided in Spain’s civil code. Despite this, the Spanish government might be considering coming up with a blockchain friendly legislation that might include tax breaks for firms dealing in blockchain technology.