Bundesbank says no euro zone cryptocurrency in sight

Bundesbank board member Carl-Ludwig Thiele has ruled out the introduction of official digital money for the euro zone and warned of losses from investments in cryptocurrencies such as bitcoin, according to a German newspaper.

 “Digital central bank money analogous to cash is currently not in sight,” Thiele told weekly Euro am Sonntag in an interview published on Saturday.

Digital currencies allow users to make online transactions across borders instantaneously and have surged in popularity this year because of their eye-watering price rises. Bitcoin, the best-known, has increased in price around twentyfold since the start of the year.

But the cryptocurrency plunged by 30 percent to below $12,000 on Friday as investors dumped it after its sharp rise to a peak close to $20,000 prompted warnings by experts of a bubble.

 “We are seeing a rapid increase in value, which brings the risk of rapid losses,” Thiele said.

Decentralised digital currencies like bitcoin are still not widely accepted. Critics say they can easily be used for money laundering and the fact that they are unregulated makes them risky to use -- hence the idea of an “e-” version of a physical currency that still has a central controlling authority.