The CEO of the Bank for International Settlements (BIS), Agustin Carstens, said that central banks are the only guarantor of the soundness of the monetary system.
Augustin Carstens at a conference at the Frankfurt Institute for Law and Finance said that a decentralized financial system and cryptocurrencies will not lead to anything good.
The essence of any currency, says BIS CEO, is that people believe in it. It is the banks that have maintained this belief for centuries, adapting to social and technological changes. Central banks are an open, reliable and, most importantly, stable platform. The constant innovation that tech companies offer is beneficial, Carstens argues, but can lead to loss of control and threaten the monetary system.
In his speech, the head of BIS noted the potential of DeFi and stablecoins, calling them interesting developments. However, he noted that all these developments “could play against us at any time”:
“The so-called stablecoins can be useful in transactions between large technology companies. But the keys to our wallets can be transferred to third parties for the purpose of enrichment.”
Agustin Carstens cited a recent BIS study calling decentralized DeFi a sham. The study states that blockchain consensus mechanisms (PoW) tend to concentrate influence. This allows a narrow circle of stakeholders to influence the entire system.
The head of BIS proposed three scenarios for the future:
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Stablecoins will compete with national currencies, which will lead to the decline of the monetary system.
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The financial system will be able to exist without powerful intermediaries, as the pioneers of the crypto industry see it.
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An open global monetary and financial system will be created that uses all the advantages of modern technologies.
Karstens gives his preference to the third option.
It is noteworthy that Agustin Carstens changed his opinion about state cryptocurrencies relatively recently.
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