Bank for International Settlements Exec Warns Against Central Bank Digital Currencies March 24, 2019 March 24, 2019 Kelly Cromley http://1AZFjzw2#Nwf63pYaMWq#xIY
Market NewsMarch 24, 2019 by Kelly Cromley

Bank for International Settlements Exec Warns Against Central Bank Digital Currencies

According to a Bloomberg report, Agustin Carstens, the critic of Bitcoin (BTC) and general manager of Bank for International Settlements (BIS) warned against the introduction of digital currencies (CBDCs) by central banks, while speaking to an audience in Dublin on 22 March.

According to the document, Carstens elaborated that a CBDC could result in a bank run (bank customers try to withdraw more money from the bank than the bank can provide), allowing people to transfer funds at a quicker rate from commercial banks to central bank accounts, thus destabilizing the system. According to Bloomberg, another problem raised by Carstens is the multiple effects of interest rates on the need for money by the public.

Carstens said this impact could result in larger central bank deposits, requiring an increase in holdings that could seriously affect cashflow on financial markets. Bloomberg also mentioned that the application of monetary policy and conventional market stability have huge functional ramifications for the central bank. He finally noted:

“Central banks do not put a brake on innovations just for the sake of it. But neither should they speed ahead disregarding all traffic conditions.”

Carstens had earlier called Bitcoin a “combination of a bubble, a Ponzi scheme and an environmental disaster” and suggested central banks to vigilantly administer cryptocurrencies to avoid them from becoming an integral part of main stream financial system.

A January report from the BIS reveals that 70% of central banks across the world are investigating the Issuance of CBDC.

AuthorKelly Cromley

Kelly is our in house crytpto researcher, delving into the stories which matter from blockchains being used in the real world to new ico coming out.