The President of the Bank for International Settlements (BIS) has admitted that central banks will probably have to issue their own cryptocurrencies or other digital currencies.
Agustin Carstens and the BIS have always been very sceptical about cryptocurrencies, but during an interview with the Financial Times, he said that the BIS is supporting central banks’ efforts to research and develop cryptocurrencies based on national legal currencies.
According to Carstens, there are already a number of central banks involved in similar projects and the BIS is working with them.
If there is clear evidence of demand from the public, the arrival of such financial instruments could be around the corner.
Carstens has in fact stated:
“It might be that it is sooner than we think that there is a market and we need to be able to provide central bank digital currencies”.
In reality, from a strictly technical point of view, these would not be real cryptocurrencies, because of course, they would be centralised coins to all intents and purposes, as are those of Facebook, JP Morgan or Goldman Sachs.
However, if they were based on blockchain, like the ones mentioned above, then they would end up being called cryptocurrencies by ordinary and less experienced users, as already often happens.
Moreover, it does not seem a coincidence that these statements come after the revelation of the details of the Libra project, about which the whole world has been talking, and after other traditional financial institutions, such as Goldman Sachs itself, which have also revealed that they are interested in developing similar financial instruments.
The BIS itself also mentioned Facebook in its latest annual report, expressing its concern that initiatives such as Libra could pose a long-term threat to central banks’ control of money.
Carstens told the Financial Times about this:
“The issue is how will the currency be used? Will there be discovery of information, or data that can be used in credit provision and how will data privacy be protected?”
After all, the technology behind cryptocurrencies is much more advanced, at a technical level, than the one that is at the base of the classic transactions of fiat currencies, so it is not surprising that even those who manage these currencies are considering to use these technologies that allow greater speed and cost-effectiveness of trades (especially international ones) as well as greater control.