The Bank for International Settlements (BIS) suggested central banks around the world to be vigilant before going ahead with issuing any cryptocurrency of their own, Reuters reported this Monday. The BIS is one of the more prominent organizations looking to view all aspects of the equation prior to deploying a central bank cryptocurrency.
The warning of BIS, which is considered to be the “central bank of central banks”, was issued in a detailed report which was compiled by two committees from the institution.
Speaking on the issuance of a possible central bank digital currency (CBDC), chair of the BIS markets committee and deputy managing director of the Monetary Authority of Singapore, Jacqueline Loh, mentioned that such a process would involve risks that have not been explored fully at this point.
Citing this issue, Loh stressed upon the necessity of vigilance and careful consideration by central banks on this matter.
“Any step towards a possible launch of a CBDC should be subject to careful and thorough consideration.” She mentioned.
She further stated:
A central bank cryptocurrency issued for users could pose many risks
While specifically mentioning the usage of CBDC by the everyday customer, chair of the BIS committee on payments and market infrastructure and an executive board member of the European Central Bank, Benoit Coeure, mentioned that such a central bank cryptocurrency could actually affect various factors from main deports to “financial stability” for these institutions, mainly due to its unexplored nature at this point.
Coeure, however, commended blockchain and its distributed ledger technology (DLT) like many of his peers, stating that it could be effective in streamlining day to day operations of security and forex trades.
The BIS report was issued just in time for it to be a point of discussion at the upcoming Group of 20 Economics (G20) discussion next week, which will be held at Buenos Aires and will be attended by key officials of central banks as well as the finance ministers of associated territories.
About the the Bank of International Settlements
Headquartered in Basel, “the Bank for International Settlements is an international financial institution owned by central banks which “fosters international monetary and financial cooperation and serves as a bank for central banks”.
The bank is certainly quite important in monetary policy from a global standpoint thus making it worthwhile to listen to in regards to matters of all things financial, its thoughts and considerations do matter for cryptocurrencies and so Bitguru will be providing updates as necessary as the situation progresses.