Excerpts from the interview with renowned currency expert Dr Mohammed Jalal Uddin.
Over the past two decades, a new currency, known as the digital currency, cryptocurrency, has taken the world by storm. Cryptocurrency has not yet been legalised in any country of the world. But in most countries of the world, especially the developing ones, cryptocurrency is being traded in various ways. Numerous questions from readers have been submitted to the weekly Surma about discussions and debates on cryptocurrency. We have faced these questions internationally on currency issues. On this subject, an expert Dr. Mohammed Jalal Uddin. Weekly Surma editor Shamsul Alam Liton interviewed him while he was visiting London in the mid of May 2022.
In this interview he gives his analysis of cryptocurrency, with a number of opinions and guidance in the public interest. Although he mentions it as his personal opinion, since the money market is in the interest of all peoples of the world, his views are importantly presented here. His main observation is that crypto is not a currency – let alone a legal currency, it is not a currency.
Each country carries out the printing and circulation of the currency of that country through its own responsibility and guarantee through the central bank or the employed agency. Cryptocurrency is just a product. It can bring economic prosperity as well as catastrophe to millions of people worldwide. It could even undermine regional peace or global stability. According to him, it is natural for investors to be at risk because the product called cryptocurrency is not even regulated. Full details of the interview are given here:
Q: What is cryptocurrency? How has the world of money accepted it?Dr. Jalal: Crypto means secret or hidden. Currency literally means the carrier of the medium of exchange. It is printed and circulated by the concerned government or its representative for printing and exchange of printed digits with guarantee. The printing of 100 dollars by the United States government and those 100 digits have been circulated in the country and abroad with the guarantee of the government. Not less than that, not more. HSBC Bank, as its representative in Hong Kong, prints and circulates the currency of that country. Cryptocurrency is not a proper name, it is a contradictory name.
There is a huge gap between cryptocurrency names and usage, as is clear from this description. Cryptocurrency does not carry the characteristics of a currency under any circumstances.Its use clearly demonstrates that it is just a product. The face value of a product fluctuates but the currency value is not volatile which makes cryptocurrency risky for investors and not stable under any circumstances.
Since cryptocurrency is not part of the currency world, there is no question of accepting it as a currency. However, as a product it has created its own global market. Somewhere it has been appreciated, again in some places it is being condemned. In a sense, anxiety is growing day by day along with more profitability. Cryptocurrency has no fixed face value and no acceptance as an exchange as there is no guarantee from a sovereign government. Besides, the feature of circulation as an exchange also does not even exist.
Q: So how is the digital currency called cryptocurrency being traded in the digital world and what is its future?
Dr. Jalal: It has gained acceptance as a product. When a product has a lot of demand, its future is bright. And when demand is low, its future is at stake.
Question: Is there any international regulatory authority to look into the product being used as currency? Has any country or government or central bank in the world recognised cryptocurrency as a currency?Dr. Jalal: To my knowledge, no country in the world has so far recognized cryptocurrency as a legal currency and there is no question of its recognition. Since the basic feature of any currency is that it does not carry crypto in any way.
Q: Many people think that cryptocurrency is a scam because the United States does not recognise it or in the United Kingdom or any other country in Europe. What do you think?
Dr. Jalal: Any product is just a product. Cryptocurrencies can be scammed for situational or environmental reasons.
Q: What is the opinion of the Currency Regulatory Authority regarding the product being used as currency?Dr. Jalal: The central bank is the regulatory authority for currency printing and circulation in different countries. As far as I know, there is no regulatory authority on currency printing and circulation at the international level.So cryptocurrency is a so-called digital currency with different names which is sometimes favored and sometimes despised, since it is just a pure product. Since no country’s central bank is responsible for any product, I believe no country’s central bank has a problem with cryptocurrency. However, if there was an international watchdog or regulator, the cryptocurrency would not have had the opportunity to expand.
Q. What could be the catastrophe if digital currency is not regulated?
Dr. Jalal: Atomic bombs can destroy a specific area or population of a country. But currency can cripple the economy of another country or region. It is very easy for a country to cause economic catastrophe by illegally printing the currency of any rival country.
In response to a supplementary question, Dr Jalal said currency printing technology and machineries are pretty much the same worldwide. So one country has the ability to print the currency of another country properly if it wants to. There are such examples in today’s world, nonetheless, in cryptocurrency, no international authority is monitoring it and that is the danger. This monitoring authority is urgently needed at the international level, since the digital world has no borders, it will only be effective and beneficial for all countries if it is under the auspices of the United Nations. This is why digital currency or cryptocurrency etc i.e. anything called currency has to be fully regulated. For this reason, I would urge the United Nations to establish a separate regulatory authority for the management of the currency industry, in addition to war or conventional diplomacy. It is vital for world peace and security. The sooner this is done, the more likely it is to avoid potential calimates.
At the end of the meeting, he stressed the need for the UN to start dialogue with its member states on an urgent basis. He expressed hope that the United Nations would soon succeed in establishing an international body to address the challenges of technology, world peace and security.