Witnessing the hair-raising ascents of the value of Bitcoin and other cryptocurrencies, the world’s central bankers are rightfully wringing their hands about how deal with them. Attitudes range from benign neglect to strict regulation to an all-out ban. A bubble? Quite possibly. Some critics like to compare it to Holland’s 17th-century tulip craze.
Officials are still wondering whether these digital currencies will be a flash in the pan or lead us to a brave new world — an “Internet of Value,” with a completely new framework for monetary policymakers. The Bank for International Settlements, the Swiss-based regulator for the world’s central banks, says there is a lot of confusion about what these new currencies are.
“What’s more relevant to us than Bitcoin is the technology behind it,” said Carl-Ludwig Thiele, an executive board member of the Bundesbank, Germany’s central bank. “We’re in discussions here with central banks from a large number of countries about our experiences,” he said. Mr. Thiele, who oversees payment transactions, said that cryptocurrencies’ underlying blockchain technology is particularly interesting. Bundesbank operates the Target2 clearing system for Europe’s central banks, one of the world’s largest transaction systems.