Brazilian, Peruvian central banks warn against bitcoin bubble

RIO DE JANEIRO, Dec. 13 (Xinhua) -- Brazilian and Peruvian central banks warned on Wednesday of potential risks posed by cryptocurrencies, or virtual currencies, best known for Bitcoins.

"Cryptocurrencies, in the form they are today, with this vertiginous climb ... without nothing to regulate, pose such risks that the central bank has issued a warning statement about them," Ilan Goldfajn, president of the Central Bank of Brazil (BCB), said at a press conference.

In a statement issued in late November, the BCB warned of the potential negative consequences of digital currencies.

Cryptocurrencies do not have the same guarantees as sovereign currencies, "nor are they anchored in real assets of any kind, which places all the risks in the hands of their owners," the statement said.

"Their value comes only from the trust that individuals place in their emitters," it continued.

Goldfajn said Wednesday that cryptocurrencies are a "typical bubble" which regulatory entities "must not incentivize."

"This is not something we should support," he added.

Also on Wednesday, Julio Velarde, president of the Central Reserve Bank of Peru, said bitcoins as the largest cryptocurrency pose a very high risk.

Velarde told the press he personally would not invest in this currency as he saw it as having no security, even though the Chicago Stock Exchange has begun accepting bitcoins, sending its value skyrocketing.

Bitcoins, the first and largest cryptocurrency created in 2009, have seen runaway growth this year, hitting a value of 5,000 U.S. dollars around September, to further pass 18,000 dollars in early December. Enditem