The argument for establishing digital currency as an alternative to fiat currency has come to an end according to Agustin Carstens, who is the head of the Bank for International Settlements.
In an interview with Bloomberg TV, Carstens argued that technology cannot be a trusted source of money. Further adding that the debate about the same has already ended. However, he did favor CBDC in his speech in Singapore.
Carstens stated that it is solely the legal and historical foundation that supports central banks. This confers significant credibility to currency. He further mentioned that he expects a forceful declaration from the Group of 20 regarding the need for reinforced regulation in the digital asset industry. According to Carstens, cryptocurrency is a financial pursuit that can only thrive “under specific circumstances.”
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BIS head favors CBDCs
During his speech at the Monetary Authority of Singapore, he recommended that Central Bank Digital Currencies (CBDCs) and tokenized deposits can improve efficiency. He suggested establishing a single blockchain network through a public-private collaboration where the central bank can reinforce the trust in CBDCs.
Crypto attracts scrutiny from regulators
2022 marked the worst year for the crypto industry as it was filled with the collapse of giant crypto firms, scams, and an end number of bankruptcies. The latest and biggest one is the Sam Bankman-Fried led empire, FTX. The FTX collapse in November, last year, sent shockwaves across the entire crypto industry, sweeping out more than $2 trillion from the cryptoverse. The market is still recovering from the massive blowout and the incident has certainly raised a lot of questions about the credibility of crypto assets.
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