In a Wednesday speech in Basel, Switzerland, Bank for International Settlements (BIS) chief Agustín Carstens argued that central bank digital currencies (CBDCs) will “sit at the core of the future financial system,” bringing innovation and meeting public expectations.
While Challenges Remain, BIS Boss Agustín Carstens Insists CBDCs Will ‘Secure the Future Monetary System’
In February, Agustín Carstens expressed skepticism about stablecoins, a sentiment he has echoed repeatedly regarding public crypto assets. Carstens holds a conviction that central bank digital currencies (CBDCs) will emerge as major innovators in the cryptocurrency domain. During a discussion focused on “securing the future monetary system,” Carstens took the opportunity to share his insights on CBDCs.
Carstens stated in the speech that CBDCs, whether for wholesale or retail use, will need to be secure and seen as such by the public to maintain trust. He acknowledged that cybersecurity and new technology like quantum computing pose challenges. Flexibility in design will be key so security measures can rapidly adapt. Carstens stated:
Maintaining an appropriate level of privacy, for example, will be crucial to ensuring public acceptance of retail CBDCs.
The BIS general manager emphasized that CBDCs must balance security with privacy. He said the BIS Innovation Hub has completed projects on integrating quantum-resistant cryptography into CBDC systems and ensuring offline resilience.
According to Carstens, CBDCs can enable efficient, sophisticated financial services. He suggested central banks have a duty to lead digital innovation for the public good. Carstens added that public crypto assets have demonstrated how easily hackers can exploit poorly designed systems, so CBDCs require robust security.
“The crypto universe has provided us with several case studies of how easy it is for hackers to infiltrate poorly designed and poorly supervised financial systems,” Carstens stressed.
Nonetheless, many privacy advocates and U.S. politicians worry that CBDCs will enable unprecedented government surveillance and control. The ability to track all transactions could lead to a major loss of financial privacy. Critics also cite risks of government overreach, and financial exclusion if CBDCs replace cash, and many have valid cybersecurity concerns.
While Carstens touted the promise of CBDCs, he conceded new digital forms of central bank money face “formidable” security challenges. “But it is an unavoidable one if central banks are to fulfill their mandate of providing money in a form that meets the public’s needs and expectations,” Carstens concluded. He added that the BIS stands ready to help central banks achieve these goals.
What do you think about the BIS chief’s commentary regarding CBDCs? Share your thoughts and opinions about this subject in the comments section below.
You can get bonuses upto $100 FREE BONUS when you:
💰 Install these recommended apps:
💲 SocialGood - 100% Crypto Back on Everyday Shopping
💲 xPortal - The DeFi For The Next Billion
💲 CryptoTab Browser - Lightweight, fast, and ready to mine!
💰 Register on these recommended exchanges:
🟡 Binance🟡 Bitfinex🟡 Bitmart🟡 Bittrex🟡 Bitget
🟡 CoinEx🟡 Crypto.com🟡 Gate.io🟡 Huobi🟡 Kucoin.
Comments