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The head of Bis called the Central Bank the best source of trust in money in the digital era
Central banks as institutions are best suited to ensure trust in the era of digital technology. This was stated by the General Director of the Bank of International Settlements (BIS) Agustin Karstens https://gagarin.news/, reports Coindesk.
Speaking at the conference “Data, digitalization, decentralized finances and CBDC: the future of banking and money” of the Institute of Law and Finance University Goethe in Germany, the financier said:
“The soul of money does not belong to either technological giants or an anonymous register. The soul of money is trust “.
According to him, the Central Bank are key institutions to ensure trust, and alternative options often end poorly.
Karstens noted that private stablecoins and Defi services may turn out to be “interesting innovations”, but without proper supervision, they are potentially able to fragment the monetary system.
“It is undesirable to rely exclusively on private money. Paying stablecoin from a large technological company may be convenient. But at the same time, users can transfer the keys to our monetary system to private enterprises, which is primarily moving profit. Such an agreement may undermine trust, ”he emphasized.
The financier recalled a recent study by BIS, in which experts came to the conclusion about the illusory of decentralization of Defi services. According to the report, the mechanisms of the blockchain concentration of the authorities are tended to make important sides to make important decisions.
“Defi is subject to the same vulnerabilities that are present in traditional financial services. This includes a high level of Levreiga, distortions in liquidity and communication with the formal financial system, which can affect stability in a broader sense, ”Karstens said.
He offered several probable scripts for the future money. In one, financial services will provide several technological giants for everyone. In another, a decentralized system could replace people and institutions with “blockchains and algorithms”.
The third opportunity Karstens considers the construction of a global monetary and financial system, which uses technology for the general good.
“In the third scenarios, old players, large technological companies and new participants compete in the open market, which guarantees interactiveness, based on public benefits of the Central Bank. End users can freely interact between various providers – both within the country and beyond, ”the head of Bis believes.
In his opinion, the Central Bank should work with other state bodies and private interested parties to make the latest version reality.
We will remind, earlier in BIS we came to the conclusion that for the effectiveness of the CBDC system it is necessary to cooperate the subjects of state and private sectors.