BIS (Bank of International Settlements) said that two separate categories of altcoins, stablecoins and DeFi altcoins, could challenge traditional banks. The Bank of International Settlements has issued a warning to world central banks. Benoit Coeuré, head of the BIS’s innovation centre, urged central banks to act quickly in response to the rise of cryptocurrencies. cryptocoin.com We look at the details.
DeFi will push altcoin projects
Coeuré warned that “stablecoins and DeFi will challenge traditional bank models.” The BIS is now more actively promoting CBDC development by central banks. “Global stablecoins, DeFi altcoin platforms and big tech firms will push the models of banks,” the head of innovation center at Bank for International Settlments said in a speech at the Eurofi Financial Forum.
Benoit Coeuré, head of the Bank for International Settlements (BIS) innovation center, warned central banks that they need to act quickly in response to the rise of cryptocurrencies and decentralized finance. Coeuré was invited to speak at the Eurofi Financial Forum, a European think tank dedicated to financial services. The incident took place in Ljubljana on Friday. In his speech, Coeuré urged central banks to step up their efforts to develop central bank digital currencies (CBDCs) in the face of competition from stablecoins and decentralized finance platforms. While acknowledging the challenges of CBDC implementation, Coeuré also issued a stern warning to central banks. Coeuré says:
Banks are concerned about the effects of CBDCs on customer deposits. Central banks are aware of these concerns and are working on answers… But make no mistake: global stablecoins, DeFi platforms, and big tech firms will challenge banks’ models no matter what.
Set target for CBDC
Coeuré also identified several goals for a potential CBDC, including privacy, security, and wide availability. Today’s talk is not the first time BIS has submitted a bid for CBDC development. In July, the BIS innovation center, the International Monetary Fund (IMF) and the World Bank released a 34-page report outlining designs for a globally interoperable CBDC to rival existing stablecoins such as Tether (USDT) and USD Coin (USDC).
However, central banks seem to be holding back, as only 8% are considering stablecoins that can be used beyond local borders. In the past, the BIS has expressed a negative view of cryptocurrencies, commenting that Bitcoin has “little public interest”, referring to its occasional use in criminal activities and environmental concerns.
However, judging from the context of Coeuré’s last speech, it seems that the BIS is now more actively promoting CBDC development. The BIS and other financial institutions have frequently expressed fears that private stablecoins could flourish as closed ecosystems or “walled gardens,” creating financial fragmentation and threatening monetary sovereignty.
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