Exec Of Bank For International Settlements Against Central Bank Crypto

Agustin Carstens is a central figure at the Bank for International Settlements or BIS, especially since he is the general manager there. But beyond its current title, he is also widely known as a massive critic of the world’s leading cryptocurrency Bitcoin. In a speech, he reportedly advised against the idea of central bank digital currencies or CBDCs. Here is everything about it in a nutshell.

Carstens’ Issues With CBDCs

According to the official report, Carstens said that a central bank digital currency is not capable of facilitating a bank run. The latter, in particular, is responsible for allowing people to move their funds to central bank accounts from commercial banks in a faster way. And since it is unable to do so, the existence of a CBDC can only prove destabilizing to the entire system.

Of course, Carstens is known for having a lot to say about Bitcoin and the idea of issuing a CBDC in the modern world. Another issue he is heavily concerned about is the variety of impact when it comes to interest rates, particularly on the demand for money from the public. He believes that this issue could arise as soon as the issuance of a central bank digital currency takes place.

An Impact On Liquidity

The general manager of Bank for International Settlements further claimed that this influence has the potential to result in larger central bank sheets. And unlike what most people thought of, according to him, these sheets will require the need to build assets up. As this process continues to take place, it could lead to a significant impact on the liquidity of the financial markets.

Carstens also pinpointed the enormous operational consequences that could arrive once the issuance of central bank digital currencies happens. These consequences will directly affect the central bank in terms of implementing monetary policy and, at the same time, compromise the stability of the traditional market.

Even more so, the BTC critic noted that central banks tend not to put a brake on innovations simply “just for the sake of it.” However, he believes that neither of them should start speeding ahead in an attempt to disregard all possible traffic conditions.

As previously reported, Carstens dubbed the world’s leading crypto as a “combination of a bubble,” let alone define it both as an environmental disaster and a Ponzi scheme. Furthermore, he asked central banks to start closely regulating all cryptos in order to prevent them from becoming involved in the entire financial system.