BIS Bitcoin Basher Warns Central Banks for Undermining Financial Stability by Issuing Digital Tokens
“Bitcoin is a bubble, a Ponzi scheme, and an environmental disaster.”
If you're a crypto enthusiast, then you must be aware of the words. The critical words about bitcoin were made some time back by Agustin Carstens, general manager at the bank for International Settlements.
The Criticism Lashed Elsewhere
The famous Mexican economist this time around has lashed the criticism at the central bank cryptocurrencies. Despite being vocal many times on how much he hates the crypto giant, now it seems his hate has shifted somewhere.
Carstens has warned over the idea of the central banks issuing their own digital tokens. According to him, the central banks own digital currencies (CBDCs) could undermine the world financial system as well as monetary policy-making.
Carstens made his point known by describing the scenario of financial panic as a result of the central banks' coins issuance stating that individuals may shift money to accounts at monetary authority from the commercial banks which will undermine the system.
Are There Any Other Views on Central Banks Coins?
Carstens had his views that the significant disadvantage of the central banks' digital tokens stems from the negative impacts by them on the market liquidity.
On the other hand, Christine Lagarde, IMF managing director had words of praise for the digital tokens the central banks are cautious about issuing. For her, the central bank's coins will be more stable as well as a safer alternative to the decentralized cryptocurrencies like bitcoin.
Tokens to Replace Banknotes
Both commercial and central banks are considering the possibility of issuing their own digital tokens. Therefore, it can be said that the concerns by Carstens are not justified because only a few of the central banks have plans to issue their own tokens.
For instance, Zug-based Crypto Valley is vocal of the crypto craze. However, the Swiss National Bank didn't see any compelling reasons to issue their own cryptocurrency. Besides, there's a big drop in countries using cash for payments such as Sweden raising questions on whether central banks should need to supplement the existing offer of the banknotes with tokens for the public.
Nevertheless, no one should rule out a possibility of more countries starting to issue their own tokens since banknotes are steadily but gradually becoming obsolete. For now, there might be different views over the issue, but with time all will be on the table on which side it ticks.