Bitcoin warning: RBS boss compares cryptocurrency to DANTE'S INFERNO

THE boss of the Royal Bank of Scotland has declared Bitcoin should come with a warning from Dante’s Inferno - “abandon all hope ye who enter here”

The boss of the Royal Bank of Scotland has declared Bitcoin should come with a warning from Dante’s Inferno - “abandon all hope ye who enter here”.

Earlier today the cryptocurrency surged towards $16,000 and in the past week Bitcoin has increased in value by $4,500, making its value grow by more than 900 per cent since the start of the year.

On Thursday afternoon it was trading at $15,800.

But RBS boss Sir Howard Davies issued a dire warning saying the cryptocurrency appeared to be a “frothy investment bubble”.

Sir Howard said on Bloomberg TV: “Put up the sign from Dante’s Inferno – ‘Abandon hope all ye who enter here’ – I think that’s probably what’s needed."

He said the Bank of England needed to co-ordinate action along with the US Federal Reserve, the Securities and Exchange Commission, and the European Central Bank.

Sir Howard argued against launching Bitcoin on the US exchanges, saying some analysts believed the move would inflate the price even further, although it could also lead bitcoin to fall owing to short-selling of the currency.

He said: “I’m not quite sure that they know enough about what [bitcoin] is,” adding it would be “a very risky move in reputational terms”.

The Financial Times reported on Thursday some Wall Street banks were pushing back against the launch of bitcoin into the mainstream financial system, warning in a letter to US regulators that the system was ill-prepared.

And the former Fed chairman Alan Greenspan - who coined the phrase “irrational exuberance” when describing overpriced assets during the dotcom bubble - said on CNBC this week that bitcoin was “not a rational currency”.

The Bank of England has taken a cautious approach to bitcoin and made incremental warnings but Sir Howard said that the central bankers were also wary of appearing to be ladies and not moving with the times.

Sir Jon Cunliffe, the deputy governor responsible for financial stability, gave a brief warning while speaking to the BBC last week.

He said consumers should “do their homework, and think carefully” before buying the currency.

RBS chief Sir Howard Davies, in 2005, has warned over Bitcoin

The UK and other EU governments are taking steps to introduce greater controls, with the Treasury planning to bring cryptocurrencies into line with anti-money-laundering and counter-terrorism financial rules.

Despite the concerns bitcoin appears, so far, to be unstoppable with analysts at Saxobank estimating Bitcoin could peak above $60,000 next year, giving the digital currency a total worth of more than $1tn, before crashing to $1,000 by 2019 as regulators introduce greater controls.

Sir Howard’s warnings are not the first to come from other senior banking figures around the world, with the heads of Goldman Sachs, JP Morgan and the Nobel-prize-winning economist Joseph Stiglitz also commenting on Bitcoin.

Mr. Stieglitz said Bitcoin is “smoke and mirrors” and “ought to be outlawed” »