The Consumer Financial Protection Bureau (CFPB) is warning Americans about the potential dangers of owning and transacting with digital currencies, including Bitcoin, Litecoin and Dogecoin. The full report is available online.
The CFPB grouped the risks under four main categories in the report, released Monday. Skeptics, however, point out that there are well more than four risks to using cash or traditional currencies.
A Redditor with the username SoloFeelings even went so far as to create his own list of risks, but for fiat currency, not digital currency:
- Bankers: Fiat currencies are targets for highly sophisticated bankers, who have been able to trick people into scams.
- Fewer protections: If you trust someone else to hold your fiat something will go wrong.
- Cost: Printing of the US fiat money costs the government more than 20 billions a year.
- Scams: Fraudsters are taking advantage of the hype surrounding fiat currencies to cheat people.
Virtual currencies are targets for highly sophisticated hackers, who have been able to breach advanced security systems.
If you trust someone else to hold your virtual currencies and something goes wrong, that company may not offer you the kind of help you expect from a bank or debit or credit card provider.
Virtual currencies can cost consumers much more to use than credit cards or even regular cash.
Fraudsters are taking advantage of the hype surrounding virtual currencies to cheat people with fake opportunities.