Mauritius | Finances

December 24, 2013

Bank of Mauritius Warns Against the Bitcoin

Fraud, impairment or difficulty of exchange against a real currency. Many risks faced by users bitcoins, a virtual currency. The Bank of Mauritius pulls the alarm.

The Bank of Mauritius is very concerned about the appearance of new forms of virtual currency. And in a statement issued Thursday, December 19, she warns the public about the risks associated with it. With this caveat, especially targeting bitcoin, she joined other central banks in the world, including the Bank of France and the People's Bank of China, which have issued similar opinions. But what are these virtual currencies and why the Bank of Mauritius has she found it necessary to issue this warning?

The Bitcoin is a virtual currency that appeared in 2009. It has not yet legal tender just like a conventional currency, which no institution is obliged to accept as payment. However, any individual can acquire bitcoins on virtual platforms (in exchange for real currency) , and store them in an electronic portfolio. It can then use this portfolio to buy goods in outlets that accept this new currency.

For the moment, the bitcoin market is very limited, both by the technology it requires that the limited number of places where you can spend bitcoins number. But the financial world was soon packed to the appearance of that currency. Proof of the speculative fever that gripped the markets, the price of bitcoin vis-à-vis the dollar fell from $ 13.5 to a peak of 1,200 dollars in the space of just 11 months. It is also extremely volatile. The international press reported Wednesday a mini-crash virtual currency, which has seen its drop to $ 500 because of the restrictive measures taken by the People's Bank of China. 

"The emergence of bitcoin is a challenge to the conventional monetary system and reflects a loss of confidence in the ability of paper money to keep its value and to maintain purchasing power,"said Eric Ng. The economist says that by issuing this warning, the Bank of Mauritius plays the role of monetary control and "defends his cheese", namely the issue of paper money.

A feature of bitcoin is that it is the users themselves who create money by checking the validity of transactions. Because it is not issued by a central authority, it allows completely bypass the conventional and avoid the costs and delays associated banking system. The bitcoin also allows its users to perform transactions in almost total anonymity. This can be seen as an advantage.

But it also means that those who choose to invest in this currency are exposed to the risk of fraud or scam, knowing that the bitcoin market is not regulated yet. Users will not be protected in the same way as a real currency in case of fraud, loss of value or if it becomes difficult to exchange bitcoins against real currency. As much risk as the Bank of Mauritius aims to prevent through its warning against virtual currencies, although little is known to date on the volume of investment in bitcoins at Mauritius .

 

Text by lexpress.mu
 

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