According to Agustin Carstens, head of the Bank for International Settlements (BIS), central banks cannot give up their role as guardians of the global financial system in favor of private cryptocurrencies.
In a speech at Princeton University, Carstens argued that private cryptocurrencies should not replace central banks. According to Bloomberg, the head of BIS compared digital currency projects to “shiny skyscrapers,” while calling central banks “trust providers for global financial infrastructure.”
While commentators such as Carstens stick to the narrative that is based on the supremacy of central banks – a system that allows 1.7 billion adults to remain out of the banking system, Bitcoin continues to get more financial adoption. The main cryptocurrency currently processes transactions worth USD 1 to 3 billion per day.
The head of BIS, like many other experts from the banking market, is not a fan of cryptocurrencies. At the beginning of his term, he also called on regulatory authorities to introduce stricter rules regarding the digital currency market.
He has now stated that central banks need digital currencies. Maybe he is changing his belief about cryptocurrencies or just admitting his ignorance. After all, Facebook Libra can see the light of day in 2020 and the emission of the digital yuan may also pose a threat to the USA.
The head of BIS only notes:
“We have a responsibility to be at the cutting edge of the debate. There is really no choice but to do so, as otherwise, events will overtake us.”
A lot is happening in the background. The European Central Bank (ECB) is currently examining ways to use the digital currency. China is another country that is working on its national digital currency, which apparently may appear on the market as early as 2020.
Meanwhile, the USA – using figuratively – is sleeping. Treasury Secretary Steve Mnuchin says the country is not planning to create a digital USD in the near future. It could end tragically for America. Some economists believe that Beijing may use the digital yuan in a new phase of the currency war.
It is also increasingly said that the following months will be a period of a currency war. It’s just about digital currencies. Fiat money in its’ current form may start to fall into oblivion.