Head of BIS: Only central banks can ensure the reliability of the monetary system – Bits Media

General Director of the Bank for International Settlements (TO) Agustin Carstens stated, that central banks are the only guarantor of the reliability of the monetary system.

Augustin Carstens said at a conference at the Frankfurt Institute of Law and Finance, what decentralized financial system and cryptocurrencies will not lead to anything good.

The essence of any currency, says BIS CEO, In that, that people believe in it. It was the banks that maintained this belief for centuries., adapting to social and technological changes. Central banks represent an open, reliable and, The main thing, stable platform. Constant innovation, that technology companies offer, states Carstens, useful, but can lead to loss of control and put the monetary system at risk.

In his speech, the head of BIS noted the potential of DeFi and stablecoins, calling them interesting developments. However, I noticed, that all these developments “could work against us at any time”:

“So-called stablecoins could prove useful in transactions between large technology companies. But the keys to our wallets can be transferred to third parties for the purpose of enrichment.”.

Agustin Carstens referred to a recent BIS study, in which the decentralization of DeFi is called a fiction. The study says, that consensus mechanisms (PoW) blockchain tends to concentrate influence. What allows a narrow circle of stakeholders to influence the entire system.

The head of BIS proposed three future scenarios:

Carstens gives his preference to the third option.

Remarkably, that Agustin Carstens changed his opinion about state cryptocurrencies relatively recently.