The general manager of the Bank for International Settlements (BIS), Agustin Carstens, says the “battle has been won” between fiat and cryptocurrency, and vigilance is no longer needed.
In a Bloomberg TV interview, BIS general manager Agustín Carstens stated, “technology doesn’t make for trusted money.”
WATCH: The argument that crypto is an alternative to fiat currency has been settled following last year’s turmoil in the digital-asset sector, according to Agustin Carstens, the head of the Bank for International Settlements https://t.co/UhS8SAFSIp pic.twitter.com/tEmqebRAzZ
— Bloomberg TV (@BloombergTV) February 23, 2023
The BIS GM noted, “Only the legal, historical infrastructure behind central banks can give great credibility to money.” His statements come after the recent back-to-back debacles in the crypto sector.
Also while during a speech at the Monetary Authority of Singapore (MAS), Carstens added that stablecoins are unreliable because they lack the “institutional arrangements and social conventions behind them.”
“What this view forgets is that what sustains fiat money is not the application of novel technologies but all the institutional arrangements and social conventions behind it. And it is precisely these arrangements and conventions that make money reliable for the public,” Carstens added.
Carstens explained how recent developments have led to severe doubts regarding stablecoins’ ability to serve as currency. Stablecoins, he pointed out, depending on the legitimacy of fiat with fewer regulatory safeguards, thus they cannot guarantee the integrity of money.
Private-sector stablecoins were also mentioned by Carstens. According to him, regulatory bodies must ensure that stablecoins don’t harm investors and consumers or fragment the monetary system.
Furthermore, central bank digital currencies, or CBDCs, and tokenized deposits, according to Carstens, can promote efficiency. He suggested a public-private partnership approach for a single blockchain where CBDCs are trusted by a central bank.