Crypto’s flexibility, and transparency key to an ideal economic system, say BIS execs
Governments around the world are looking to central bank digital currencies (CBDCs) as a tool to improve the existing fiat ecosystem. According to a report by the International Monetary Fund (IMF), the technical strength of digital currencies is consistent with the central bank’s fundamental belief that they are critical to the functioning of a rich monetary ecosystem.
As noted by BIS executives, one of the biggest weaknesses hindering mainstream cryptocurrency adoption today is DeFi congestion and reliance on volatile assets.
“Digital technologies promise a bright future for the monetary system,” said Agustín Carstens, Deputy Managing Director of the International Monetary Fund, and Jon Frost and Hyun Song Shin, Directors of the BIS.
A BIS study in June found that cryptocurrencies will outperform fiat ecosystems in achieving the lofty goals of a future monetary system.
Some of the notable downsides to the mainstream adoption of cryptocurrencies cited by BIS executives are decentralized finance (DeFi) bottlenecks and reliance on volatile assets.
Both wholesale and retail CBDCs can be obtained from Crypto ecosystem, which benefits end users, this post stands out:
“Having received the Central Bank Trust Center, the private sector can engage in the best new technologies for the development of rich and different monetary conditions.”
Central banks have also recommended the use of innovations such as tokenizing to allow you to use many fiat coins and traders and customers.
The International Monetary Fund’s gloomy forecast of a global recession has raised concerns about a future slowdown in cryptocurrency markets. Cointelegraph previously reported that Bitcoin (BTC) markets could recover as uncertainty about the current state of the economy and geopolitical tensions ease.
However, the IMF noted that the various liquidations, bankruptcies and losses of major companies such as Celsius, Three Arrows Capital and Voyager Digital Holdings had little impact on traditional financial systems.
