Central banks are looking to take charge of the chaotic payment networks that have left people waiting days for their money. They would rather do this themselves than allow private companies like Facebook’s Libra project, which was eventually canceled due to its inability to regulate cryptocurrency prices and looseness with financial regulations.
Bitcoin has been ranked as the least credible of all assets to achieve that, with stablecoins coming in a close second, given concerns over their market power.
The report paints a bleak picture of bitcoin, calling it “inherently inefficient” and mentioning its use by criminals. It also mentioned the crypto’s volatility.
While only a few CBDCs exist, linking individual jurisdictions’ central bank-issued digital currencies will create more mileage, according to Bindseil.
The development of CBDCs is a huge step towards establishing an interoperable financial system, but it will not be possible if they are not agreed upon in advance. This new technology needs to work with other zones so everything can go smoothly and without much hassle or delay.
The report also added that they should add the existing domestic instant payment. This domestic instant-payment system should be able to operate with each other despite questions over how the money is vetted and deal with counterparties who might default.
Why Is Crypto a “Ponzi scheme”
The European Central Bank’s executive board member, Fabio Panetta, has come out saying that crypto is a “Ponzi scheme” and regulators should be less tolerant towards it.
The Bank for International Settlements, a major central banks’ association that previously revealed nearly 90% of those in charge are working on an experiment with a currency called the CBDC (Currency-backed Digital Currency), has called upon all parties involved to cooperate more closely.