Should banks design their own cryptocurrencies? According to Agustin Carstens, general manager of the Bank for International Settlements, the answer is a definitive “no.”
Crypto Isn’t Cool?
Carstens has never been a fan of crypto, having likening bitcoin to a “bubble,” a “Ponzi scheme” and an “environmental disaster” in the past. At a speech in Dublin, Carstens explained his fear of cryptocurrencies further, saying that they undermine the global banking system.
He is now warning banks of the dangers of creating their own digital currencies. Virtual coins, he claims, go against everything banks stand for. They decrease financial stability and could prevent banks from implementing policies designed to enhance customer safety.
In the speech, he comments:
There are huge operational consequences for central banks in implementing monetary policy and implications for the stability of the financial system. Central banks do not put a brake on innovations just for the sake of it, but neither should they speed ahead disregarding all traffic conditions.
The Basis of Concern
In other words, banks and financial institutions should work hard to keep up with present trends in the monetary space, but not to the point that it somehow hurts functionality.