The Bank of International Settlements (BIS), a financial institution under central banks’ possession, will be publishing its annual economic report on June 24, 2018. It has also been stated that two chapters of the report will only consider cryptocurrencies and the central bank’s perspective on the digital currency.
Based on the review, it looks like the central banks’ perspective is not as bright as it can be, suggesting that “many cryptocurrencies are ultimately get-rich-quick schemes”.
The review also emphasized on the notion of trust consumers have in the firm issuing assets under consideration and that when it comes to cryptos, it is not up to par. In particular, the extract reads:
“What makes currencies credible is trust in the issuing institution, and successful central banks have a proven record of earning this public trust. The short experience of cryptocurrencies shows that technology, however sophisticated, is a poor substitute for hard-earned trust in sound institutions.”
This opinion comes of no surprise as Markers Committee Chair, Jackqueline Loh reported earlier this year, that BIS did not consider cryptocurrencies as a viable currency to help construct a “cashless society”.
In addition, the financial institution also suggested that when things do not necessarily go as planned, central banks-issued assets might be risky, which at the time meant to them as, “a flight towards the central bank may occur on a fast and large-scale, challenging commercial banks and the central bank to manage such situations.”