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- Bank of International Settlements publishes a report covering topics like cryptocurrency and central bank digital currencies
- The report strongly opposes Bitcoin and other crypto assets that can only help with more financial scams according to it
- CBDCs should be developed in light of digital developments required by the growing financial market
There exists a distinctive line of difference between a currency and an asset. Even though crypto has the word currency in it, it does not suffice the basic functions of a fiat money. Hence, cryptocurrencies are often called out or used as actual money but it is definitely not. In a recent report issued, It is termed to be a speculative asset by the Bank of International Settlements and is recognized by them as a means to facilitate more frauds and crimes in the financial sector rather than a substitute or parallel for money.
BIS defies any positive or legal action from Bitcoin usage
The Bank of International Settlements (BIS) published the annual economic report on the 23rd June that focused on topics related to cryptocurrency, especially Bitcoin and other Central Bank digital currencies (CBDCs). The BIS states its concern over how financial technology is evolving around cryptocurrency and digital developments rapidly. Central banks across the globe are placing such developments high on their list of agendas. The attention sought by Bitcoin is one of the critical factors that is discussed in the report. Second being a debacle on the topic of stablecoins and lastly the continual entry of large scaled technological corporations that revolve around fintech, into payment and financial services.
The report emphasizes on how crypto assets are not an actual replacement for money and will never come to that stage as well. It is called to be a catalyst bridge for more money laundering and other fraudulent activities, making it a very speculative asset.
CBDCs to emerge as a new financial development for the global economy
The report discusses how stablecoin is also a bubble created by cryptocurrency supporters. The trustable factor still remains in question. Stablecoins are a monetary liquidity breaking system according to the BIS report. Moving the report strongly against Bitcoin, it also talks about the carbon footprint left by the mining of cryptocurrency, Bitcoin in particular. Mining of cryptocurrency requires a truckload of energy for even one block of data to be entered into the blockchain.
On the other hand, CBDCs are discussed in a positive light in the economic report. According to them, more and more CBDCs will be launched by Central Banks in the near future that will permit swift cross border transactions, hence making the international involvement of nations in developing such systems of paramount importance. This stabilizes the consistent problem of instability and volatility in prices that is usually the core of the problem for any cryptocurrency. The report published by the BIS strongly advocates the cons of Bitcoin and the pros of CBDCs.
With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.
