Head of Bank of International Settlements (BIS) Supports CBDC Adoption Amid Digital Currency Debate
Agustin Carstens, the head of the Bank of International Settlements (BIS), has voiced his belief that digital currency is no longer a viable replacement for fiat currency. Speaking in an interview with Bloomberg TV, Carstens argued that technology could not be relied upon as a reliable means of money and that the discussion about this topic was now closed. However, he did express support for Central Bank Digital Currencies (CBDCs) in his recent address in Singapore.
Carstens emphasized that the only thing that keeps central banks afloat is their legal and historical legitimacy, which significantly enhances the trustworthiness of currencies. He also suggested that the Group of 20 (G20) should issue a strong statement on the need for more regulation of the digital asset sector. According to Carstens, the cryptocurrency market can only succeed under specific conditions.
During his speech at the Monetary Authority of Singapore, Carstens proposed the use of CBDCs and tokenized deposits as methods to increase productivity. He also advocated for a public-private partnership to establish a unified blockchain, which could boost confidence in CBDCs.
The cryptocurrency sector underwent a challenging year in 2022, with many large cryptocurrency firms failing, frauds taking place, and a record number of bankruptcies. In November 2022, the collapse of the FTX exchange sent shockwaves throughout the crypto sector. The market is still striving to recover from the enormous explosion, and the FTX failure has raised concerns about the reliability of crypto assets.
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