Crypto industry will 'come up with new things' and national digital currencies are moving ahead despite recent turmoil, BIS says
- Cryptocurrencies will likely re-emerge from last year's turmoil, according to the Bank for International Settlements.
- "I would assume that the industry will learn from these failures and they will come up with new things," BIS Innovation Hub chief Cecilia Skingsley told Reuters.
Cryptocurrencies will likely re-emerge from last year's turmoil, according to the Bank for International Settlements' head of innovation Cecilia Skingsley.
The BIS, the finance body that essentially oversees global central banks, has been deeply skeptical of crypto in the past, even comparing it to a Ponzi scheme. And the past year has seen the collapse of FTX and firms like Three Arrows Capital.
"I would assume that the industry will learn from these failures and they will come up with new things," Skingsley told Reuters.
Despite a brutal 2022, cryptos have so far seen something of a resurgence in 2023. Bitcoin, the largest cryptocurrency by market capitalization, has jumped 38% from the start of the year.
Meanwhile, turbulence throughout cryptos has done little to deter global central banks' plans for national digital currencies, or CBDCs, in the future, and she added "those who have these projects are pushing on with them."
BIS has played a large role in helping coordinate the launch of CBDCs. Eleven countries have rolled out nationally minted tokens, and Reuters added that roughly 95% of the world's GDP are exploring plans to issue central bank tokens.
The US, China and EU are considering CBDCs or already experimenting with them, with Beijing planning to broaden its digital yuan test run to the majority of its population.
Still, she doubted that CBDCs would allow global finance to achieve "full interconnectedness" as the new currencies would likely only be compatible between countries that are politically aligned.
"There will be too many frictions and not all countries in the world will be prepared to cooperate fully with all the other countries in the world," she told Reuters.
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