The head of the Bank of International Settlements [BIS], Augustin Carstens, has recently made a point to bring out the issue of central banks throughout the world issuing their own crypto assets. Augustin Carstens has said that central banks should not issue their own cryptocurrencies as these could have big operational consequences and could cause serious implications regarding the stability of the financial system.
According to news source CityAM,
“Carstens’ words came during a speech at the Central Bank of Ireland, in which he pointed out he believes central bank digital currencies (CBDC) are going to have consequences for central banks in implementing monetary policy and implications for the stability of the financial system.”
He said that according to the traditional ways, central banks take care that the inflation is under proper control and that the economy has been running smoothly which in turn makes sure that the financial system is perfectly sound. This, while commercial banks “thrive by attracting and serving customers.”
Augustin Carstens said,
“Crypto assets of central banks would change the demand for base money and its composition in unpredictable ways. Central banks do not put a brake on innovations just for the sake of it. But neither should they speed ahead disregarding all traffic condition.”
His words have come shortly after J.P. Morgan Chase, the largest bank of US and the sixth largest bank in the world, unveiled that it was launching its own cryptocurrency, which was named as the JPM Coin and which is all set to be used in instant payment settlements of their clients. The CEO of J.P. Morgan, Jamie Dimon was a notable bitcoin critic two years ago when the flagship crypto asset’s price was rising to nearly $20,000 which was its all-time high. With time he distanced himself from it, mainly because the financial institution started focussing on its own crypto.
JPM Coin has been under heavy fire as all the economists, crypto pioneers, cryptocurrency miners, investment managers and advocates have heavily criticized the stablecoin. Carstens himself has criticized cryptocurrencies in the past as he had told crypto enthusiasts to “stop trying to create money”. As per his words, enthusiasts would be better off exploring their talents, as creating money has been an old obsession which has never really worked.