Bitcoin is a Ponzi Scheme, says World Bank President

@asrizal - World Bank Group President Jim Yong Kim said virtual currencies such as bitcoin and so are similar to ponzi schemes.

"However, I hold the majority opinion that virtual currency is basically a ponzi scheme, it's not clear how it works," Kim said.

Ponzi scheme is a false investment mode that pays profit to investors from their own money or money paid by the next investor, not from profit.

Kim said, the World Bank is closely watching blockchain technology, a platform that allows digital assets to be traded safely.

According to him, there is hope that the technology can be used in developing countries to manage finances to be more effective and reduce the number of corruption.

The value of virtual currency skyrocketed throughout the year 2017 before finally plummeted. As it degenerates, the bitcoin value is almost two-thirds off its value in mid-December 2017.

Virtual currency technology was seen as potentially changing the shape of global finance. However, concerns also arise over their volatility and potential for use in money laundering and other crimes.

In his speech this week, Bank of International Settlements Chairman Agustin Carstens said it is likely that authorities will regulate the digital currency because of its presence in the financial system could lead to disruption.

Meanwhile, Federal Reserve Federal Reserve Chairman Jerome Powell said good governance and risk management are critical for the virtual currency.