Report: Bitcoin Unable to Solve Problems of Traditional Payment Systems

An official from Spain's central bank, the Bank of Spain believes that Bitcoin is unable to resolve the problems faced by major payment systems.

BDE's Deputy General Director for financial innovations and market infrastructure, Carlos Colesa, gave his opinion on the leading cryptocurrency in a report published on Sunday, Feb. 17.The study dubbed "Bitcoin: a solution for payment systems or a solution in search of a problem?," is marked as an "Occasional paper," according to Cointelegraph en Español.

Colesa compared Bitcoin to traditional payment systems and financial intermediaries.

First, he says that the Bitcoin blockchain processes only 250,000 transactions daily, which is a relatively small volume for a global system.

Major Spanish retail system, the Sistema Nacional de Compensación Electrónica, reportedly handled around 7.2 million payments daily, as of 2017.Given that the miners have to approve transactions, Bitcoin payments are slow, and the time required for a transactions is purportedly unpredictable.

The report further states that the absence of governance and coordination impedes improvements to the system.

The report echoes the stance of some Bitcoin sceptics, such as Nouriel Roubini, who believe that crypto is in fact very centralized.

Crypto has commissions for transactions, and the payment speed depends on its rate.

"It is unlikely that Bitcoin in its current modification will have any significant impact on the finance sector as an alternative to traditional payment systems."

The BDE governor, Pablo Hernández de Cos, has determined that crypto "Cannot replace money and is not a means of payment or common exchange."