Justifications made by the Cambodian Bank:
The issuance of Crypto Currencies is not backed by collateral
Implied statement: our money is backed by our supreme authority, whereas no one will back up the value of a cryptocurrency.
Implied statement: cryptocurrencies have no supporting value
- Collateral is defined as security pledged for the payment of a loan. Who is borrowing in a cash transaction?
- Anyone saying that cryptocurrencies are not ‘backed’ by anything fail to calculate the Value converted by running megawatts through specialized hardware each block, each hour, each day, for years.
- The current block (#528304 as of writing) sits atop of 528303 blocks worth of electricity expended. Hint: That’s a lot of Value.
Investment in Crypto Currencies may incur losses due to volatility of its face value
Implied statement: the role of governments and national banks is to eliminate risk and volatility
Implied statement: cryptocurrencies are more volatile than our safe markets
- The results of this strategy is elimination of opportunities.
- Investment into anything with a potential reward has a degree of risk.
- Governments, central banks, and regulators acting as the gatekeepers of ‘non-volatile’ markets creates an environment ripe for corruption, since there is a lot to gain from deciding which markets are “acceptable”.
Facing cybercrime and losses of funds due to the system being hacked
Implied statement: If you give us total control over your money, there will be no more cybercrime or loss of funds.
Implied statement: Crypto exchanges are hacked all the time and you don’t get your money back.
- How many times has Swift been hacked? How many times has the Bitcoin protocol been hacked?
There is no customer protection mechanism and the user of Crypto Currencies is an anonymous person who has no identity or historical records, which may cause risks of money laundering and financing of terrorism
Implied statement: If we aren’t the sole arbiters of who is trustworthy, more money will go into the hands of terrorists and criminals.
Implied statement: Don’t trust anyone who is anonymous.
- The danger of giving unaccountable entities total autonomy over currencies seems far greater than the danger of unaccountable money in the hands of terrorists and criminals.
Could this be a trial run for future central banks and their respective governments in dealing with cryptocurrencies? Or is Cambodia just an outlier of specialized control?