The head of the Bank for International Settlements, Agustin Carstens, said the battle has been won. During an interview on Wednesday, he highlighted the difficulties facing the crypto sector.
Crypto doesn’t make trust money
During an interview given to Bloomberg, Agustin Carstens, head of the BIS said that cryptos have lost the battle against fiat currencies. He asserted: “ a technology does not make money trust “. The collapse of FTX in November testifies to this situation. It is now one of the most publicized cases of corporate crime in the history of the United States.
Currently, the crypto sector is trying to recover from this estimated $2 trillion drop. He also took the example of bitcoin (BTC) falling 65% after peaking in 2021. The claim that tokens can be trusted as stores of value and mediums of exchange is not more valid. The collapse of the crypto and the chain of bankruptcies confirm this. For Carstens, cryptos have therefore lost the battle against fiat currencies.
The importance of central banks
Mr Carstens said only the legal and historical infrastructure behind central banks can give money great credibility. Moreover, he anticipates a declaration by the Group of 20 for a strengthening of the regulation of the crypto sector. He added that crypto is a financial activity that only really exists under certain conditions.
Having also spoken before the Monetary Authority of Singapore, he affirmed the importance of CBDCs and tokenized deposits. These can promote efficiency, he explained. He then proposed the model of a unified blockchain within the framework of a public-private partnership. As part of this partnership, a central bank supports trust in CBDCs. He finally mentioned the stable currencies of the private sector. Regulators need to make sure stablecoins don’t harm investors and consumers, he said.
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