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Top global banking official warns of virtual currency risks

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BERLIN (AP) - A top international banking official says that central banks should be prepared to intervene to prevent virtual currencies becoming a threat to financial stability.

Agustin Carstens, the general manager of the Bank for International Settlements - an international organization for central banks - said Tuesday that bitcoin "has become a combination of a bubble, a Ponzi scheme and an environmental disaster."

In a speech in Frankfurt, Germany, Carstens said many people believe so far that, given the limited size of virtual currencies, "concerns about them do not rise to a systemic level."

But he added that "if authorities do not act pre-emptively, cryptocurrencies could become more interconnected with the main financial system and become a threat to financial stability."

He said central banks must be prepared to intervene if necessary.

Copyright 2018 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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