The Bank of International Settlements (BIS) is dedicating two chapters of its forthcoming annual economic report to cryptocurrencies.
BIS – considered to be the central bank’s central bank – will publish those two chapters this weekend on June 17, the institution announced this week. The full report will be published on June 24.
The upcoming report will follow the bank’s most recent quarterly review, which warned that “many cryptocurrencies are ultimately get-rich-quick schemes.”
The review stated:
“What makes currencies credible is trust in the issuing institution, and successful central banks have a proven record of earning this public trust. The short experience of cryptocurrencies shows that technology, however sophisticated, is a poor substitute for hard-earned trust in sound institutions. “
Similarly, BIS touched on the topic in an opinion piece written in part by Markets Committee chair Jackqueline Loh in March. The piece claimed that public cryptocurrencies are not feasible options for a cashless society, as previously reported by CoinDesk.
By the same token, the bank has claimed that digital currencies issued by central banks could carry unwelcome side-effects, such as making periods of financial instability worse by helping banks’ clients funnel their money from their accounts more quickly.
“A general purpose CBDC could give rise to higher instability of commercial bank deposit funding. Even if designed primarily with payment purposes in mind, in periods of stress a flight towards the central bank may occur on a fast and large-scale, challenging commercial banks and the central bank to manage such situations,” BIS stated at the time.
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