Bank International Settlements Says Crypto Can Be a Threat to Financial Stability

Liputan6.com, Jakarta – A new survey from the Bank for International Settlements (BIS) reveals that, if used widely for payments, crypto assets including stablecoins can become a threat to financial stability.

The survey was conducted as the number of central banks intending to debut CBDCs in the near future has doubled since last year, despite the catastrophe that has occurred in the crypto market.

“In order to strengthen and coordinate regulatory approaches to contain their risks to the financial system, CPMI, IOSCO, FSB, and BCBS publish updated or new guidelines and standards for stablecoins or crypto activity and markets more broadly,” the BIS said in its report, quoted from Yahoo FinanceSaturday (15/7/2023).

Nearly a quarter of all central banks globally are currently piloting retail CBDCs, with more than two dozen state-backed digital currencies set to launch by 2030, the BIS found.

A CBDC, or central bank digital currency, is the digital form of a country’s or international economic zone’s currency, issued by that entity’s central bank. CBDCs are similar to stablecoins, cryptocurrencies that peg their value to fiat currencies. So far, CBDCs have been issued by Nigeria, Jamaica, the Bahamas, and the Eastern Caribbean.

As many as 60 percent of central banks surveyed said the emergence and proliferation of stablecoins and other crypto assets has accelerated their work on CBDCs, according to the report.

That’s not to say, however, that last year’s disastrous crypto news cycle has convinced all central banks of the need for a state-backed digital currency.

While 93 percent of all central banks are investigating CBDCs in some capacity, a growing number of them are also indicating with greater certainty they have no intention of issuing digital currency in the near future.

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