BITCOIN’S price faces another huge fall amid warnings that the cryptocurrency will become regulated to stop people from using it for the “wrong” reasons.
Bitcoin has started to recover following its huge fall, but Jacob Frenkel, an economist for JPMorgan has insisted the cryptocurrency needs to be regulated.
Fears that cryptocurrencies face regulation may cause its prices to plummet and Bitcoin, Ripple and ethereum could all face checks from authorities.
Mr Frenkel has said that Bitcoin, in particular, needs to be regulated to stop people using the electronic currency for the “wrong things”.
He said: “Where it is in JPMorgan, we recognise very much that extraordinary potential and benefits from the blockchain technology.
“In fact, it is being implemented and used and we are putting a lot of resources into it.
“But this is an important point as well to clarify. There is the Bitcoin, the cryptocurrency. A Bitcoin is not a blockchain, you can be all in favour of blockchain and still find a deficiency in the Bitcoin.
“Furthermore, a Bitcoin is not the only form of in cryptic currency.”
Mr Frenkel explained the issues with Bitcoin as he spoke to Bloomberg. He said: “Let’s identify what is the problem with a Bitcoin? It is anonymous which is no good because it can be used for the wrong things.
“It comes from somewhere, there is no backing. So if you could design an in-cryptic currency that is satisfying these limitations at least you will be able to go on.
“I think it is important that this area is regulated and regulated in an appropriate way.”
The comments come after the South Korean Government announced that it would be cracking down and impose stricter regulation on cryptocurrency trading.
Bitcoin is a cryptocurrency not controlled by a single administrator and can be used to buy things worldwide electronically.
Bill Winters, the CEO of Standard Chartered said that he could not see any way where the cryptocurrencies and Blockchain were not looking into by authorities.
He said: “We think it is very real, it is fundamental. We have got some extremely interesting early stage developments how clearing currency pairs with disrupted technology.
“We are a complete believer in the technology underlying the cryptocurrencies. The cryptocurrencies themselves I imagine will find themselves quite regulated. Of course, they were designed in many ways to avoid being regulated.
“But like is happening in Korea and China, I find it hard to imagine that authorities are going to allow widespread use of any currency or cryptocurrency for cross-border payments or domestic payments for that matter without some ability to be able to look in and see what is going on.”
Mr Winters added that he thought the price of Bitcoin would suffer as a result of increased regulation.
Bitcoin saw its highest value before Christmas when it reached the monumental price of just under $20,000.
The price of Bitcoin has since fallen, and according to Coindesk the cryptocurrency over the last 24 hours has fallen 2.62 percent to $11,101.12 at 16.43pm (GMT) on Thursday 25 January.
Coindesk also says Ripple’s XRP is also falling, down 1.78 percent to $1.31 at 16.44pm on Thursday 25 January. At the same time, ethereum was down 1.07 percent to $1,046.69.