Crypto but better – Central bank digital currency (MNBC) has become a prominent topic in the crypto environment. Recently, we have seen the British Parliament position itself positively a digital pounde or Brazil take a big step towards a digital real. For reasons specific to each nationMNBCs can become a financial vehicle inevitablethat’s why it was finally logical that they ended up worrying about the example of cOORDINATION central banks, namely the Bank for International Settlements (encore). The latest bulletin from the Basel institution addresses these issues MNBC through the prism of the systemic risks associated with cryptocurrency. The explanations.
The Bank for International Settlements has a dim view of Bitcoin and crypto
of bank for international settlements is an organization responsible for cooperation between national central banks and global financial stability. Based in Switzerland, it brings together 63 PLACE and its recommendations are scrutinized with the utmost attention by local and international authorities. His bulletins the information is published several times a year and the last one, number 66, is about crypto AND MNBC.
Matteo Aquilinathe chief economist of BRI, analyzed the events The last of the crypto market and learned the following lesson:
“Recent failures in digital asset markets underscore the need to address the risks posed by cryptocurrencies before these markets become systemic. »
Not only exchanges Crypto Share Centralized and Decentralized Vulnerability Points with traditional finance (TradFi), but in many ways they are even more fragile. The effect of sinkthe problems of liquidity or even asymmetry ininformation they are all inherent risks in this sector.
The international institution is considering various responses to the crypto-threat
Faced with this reality and the fact that “crypto won’t go away on its own”, encore is considering three the axes of reaction possible to protect customer, mARkETS AND stability The financial world: stop, contain and regulate.
To stop it is tempting because it protects the international financial system and consumers. But this option contradicts some founding principles of societies and stop it to take advantage of crypto-related innovations. Moreover, it seems a complete ban vs.involved in raising.
CONTAIN isolating cryptography-related activities from the rest of the market is the second option. This would make it possible to benefit from innovations in RESTRICTIVE the dangers. The idea would be to create a firewall between the two markets, but the implementation is, again, complicated. Nor would it prevent potential risks to the consumer or financial stability.
At least, the last option is adjustment. It would be a matter of applying the same kind of tools control than for TradFi in Mapping precisely the high-risk areas in CeFi and especially in DeFi. But the contours of this solution are currently unclear and uncertain due to the ambiguity of DeFi and in particular its potential points of contact with TradFi.
…and ultimately favors central bank digital currency (MNBC)
Finally, encore consider a middle ground that would take the strengths of each option at the same time. Here is an overview of conclusions which lead directly to MNBC :
“Central banks can encourage innovation in TradFi to contribute to a more efficient monetary system. (…) Some areas of crypto can be used to improve the way services are provided. [Les MNBC] it can help reduce the cost of payments, improve financial inclusion, strengthen system integrity, and promote user control over data and privacy. »
of encore would love everyone strengths of cryptos while maintaining all those of a classic central bank currency. That’s why MNBC are the new favorite tool of these international institutions. We will see how each country takes its recommendations into account. But Russia, excluded from the BRI since the outbreak of the war in Ukraine, has already come to the same conclusions.
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