The Bank for International Settlements (BIS) said that 90% of central banks explore CBDCs and that cryptocurrency cryptocurrencies are digital currencies that use cryptographic technologies to secure their operation. fears are materializing.
***
- BIS report addresses the cryptomarket crash.
- Hay “fallas estructurales” en las criptomonedas que las hacen inadecuadas para el sistema monetario.
- The BIS supports CBDCs, but is skeptical of cryptocurrencies.
The Bank for International Settlements, better known as BIS for its acronym in English, has issued anuevo informe which addresses the dangers of cryptocurrencies and some of their flaws, while highlighting how some of their technological features could potentially be leveraged for implementation in the global monetary system.
The coordinating body for central banks around the world, addressed the recent price drop in the cryptocurrency market an area or arena, online or offline, in which commercial dealings are conducted. to illustrate some of the risks in the sector. The publication specifically mentioned the recent collapse of the stablecoin a cryptocurrency with extremely low volatility, sometimes used as a means of portfolio diversification. Examples include gold-backed cryptocurrency or fiat-pegged cryptocurrency. TerraUSD (USDT) and the 70% drop in the price of Bitcoin the biggest and most popular cryptocurrency in the world. It is a decentralized digital currency that enables users to make trustless peer-to-peer transactions. as indicators that there is a structural problem.
As dramatic as these recent price collapses have been, focusing on price action alone diverts attention from the deeper structural flaws in cryptocurrencies that make them unsuitable as a basis for a monetary system that serves society.
Cryptocurrency Failures Materialize
While the report admits that the advent of cryptocurrencies raised the demand for a new paradigm for the financial system, the most recent market downturn and other factors have revealed that these are “ inadequate” for the monetary system.
“ Recent events have revealed a huge gulf between the crypto vision and its reality. The implosion of the stable currency currency is a medium of exchange that defines value. TerraUSD and the collapse of its sister currency Luna have underlined the weakness of a system that relies on [speculative] selling. “, dijo el BIS.
Beyond the price turmoil, the note also mentions other indicators of major structural flaws, including the “ fragmentation of the world of cryptocurrencies and the search for a “cryptocurrency”. nominal anchor “by the stablecoins . The authors of the report also emphasized the “. serious concerns “of the lack of regulation.
In this line of ideas, the general manager of the BIS, Agustín Carstens, said in an interview for Reuters that the dangers previously warned about the growth of the decentralized decentralization refers to the property of a system in which nodes or actors work in concert in a distributed fashion to achieve a common goal. digital cash cash is the most liquid form of money: physical coins and banknotes in the most narrow sense of the term. industry are now materializing.
I believe that all these weaknesses that were pointed out earlier have practically materialized. You just can’t defy gravity… At some point you really have to face the music. .
While he said he did not expect the cryptomarket collapse to cause a systemic crisis in global finance, he did not rule out the possibility of significant losses, adding that the The opaque nature of cryptospace fueled uncertainty. “ As far as we know, it should be quite manageable. “, dijo Carstens. “Pero, hay muchas cosas que no sabemos“.
90% of banks investigate CBDCs
Despite being skeptical of cryptocurrencies, the BIS did not rule out their potential to innovate the global monetary system. However, the agency emphasized that for this technological advance to integrate with the financial system and shape the monetary future, it needs to be backed by governments and given credibility.
Beyond Bitcoin and digital currencies as we know them, the report points to a vision in which central banks leverage money that a trader borrows from a brokerage, enabling them to gain far greater exposure to a position than what their capital allows. the technological benefits of this new asset class to create digital versions of their own fiat fiat currency is “legal tender” backed by a central government, such as the Federal Reserve, and with its own banking system, such as fractional reserve banking. It can take the form of physical cash, or it can be represented electronically, such as with bank credit. currencies.
In this regard, the institution revealed that approximately 90% of central banks around the world are investigating the feasibility of adopting central bank digital currencies, also called CBDCs. “ Central bank digital digital technologies are these electronic tools that have the ability to generate, store or even process data. currencies (CBDC) and retail fast payment systems (FPS) are well positioned to serve the public interest through greater convenience and lower costs, while maintaining the integrity of the system. “reads the report.
Decentralisation and distributed authoritative record (DLT) technology can also play a constructive role, for example, when central banks work together in multiple CBDC arrangements.
BIS backs CBDCs, but not crypto
While the report criticized the inability of cryptocurrencies to perform “funciones fundamentales básicas del dinero“He praised the programmable nature of these assets, as well as the borderless elements of decentralized finance (DeFi), as potential benefits to justify integration into CBDCs.
However, the BIS admitted that there are still multiple challenges to this development, including cross-border capabilities and interoperability between systems. When asked about this issue, Carstens expressed confidence that the BIS will be able to meet the challenges of the international standards for CBDC interoperability blockchain interoperability, or cross-chain interoperability, is the ability to see and share information across multiple blockchains. will be the next step forward. but they won’t be here so soon. “ I think in the next few years. Probably 12 months is too short a trading technique in which a trader borrows an asset in order to sell it, with the expectation that the price will continue to decline. In the event that the price does decline, the short seller will then buy the asset at this lower price in order to return it to the lender of the asset, making the difference in profit. “.
This is not the first time that the BIS has been skeptical about cryptocurrencies, while highlighting the benefits of decentralized systems and urging greater efforts for the development of CBDCs. In its latest report, the agency cited the rise in cryptocurrency piracy as part of the inherent security the term securities refers to a fungible and tradable financial instrument that carries a type of monetary value. risks of the digital asset sector.
This Tuesday’s report is a preview for a next informe BIS annual economic report to be published on 26 June.
- 9 out of 10 central banks explore CBDC, BIS survey reveals
- Decentralization the handover of control from a central authority to several different custodians. of DeFi a movement encouraging alternatives to traditional, centralized forms of financial services. is an “illusion”, says BIS as it reviews possible regulation
- Peter Schiff claims Bitcoin “has been dead money” for the last 4.5 years
Article by Hannah Estefania Perez / DiarioBitcoin
Imagen de Unsplash
