June 24, the Bank of International Settlements (BIS) will publish its annual economic report, but its two chapters on cryptocurrencies will be published earlier – June 17. This is written by CoinDesk.
In the new report, the BIS, which is often referred to as the central bank for central banks, is likely to hold the same opinion as in its most recent quarterly report: “Many cryptocurrencies are quick-fortune schemes.”
“Currencies are credible due to the fact that people believe in their emissions institute, and successful central banks have experience in winning this people’s trust. The short experience of cryptocurrency shows that this technology, despite its progressiveness, is a bad substitute for the trust of the institutions mentioned above,” said the quarterly report.
In March, the topic was touched upon by the chairman of the BIS market committee Jacqueline Lo. In her column, she expressed the opinion that public cryptocurrencies are an unsuitable option for a cashless society.
The BIS also stated that the digital currencies issued by the Central Bank may have undesirable side effects. In particular, they can make periods of financial instability even worse, since this will allow bank customers to withdraw funds from their accounts faster.
“The digital currencies of the Central Bank of the general use may lead to an increase in instability in the field of deposit financing of commercial banks. Even if these currencies are intended solely for payments, in the crisis periods, the money flow towards the central bank will be faster and larger, which will force commercial banks and the Central Bank to take action to resolve these situations,” the BIS said then.