Central Bankers Attack On Crypto Is ‘A Legacy View’, Failure To Acknowledge DeFi’s ‘Revolutionary Benefits’

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As the Bank of international agreements(BIS), also known as “the central bank of central banks”, sought to monopolize confidence in money with its new report this week, which analysts stress simply represents “a legacy view” that brings a host of new risks. , and the BIS does not recognize the “revolutionary benefits” of the still nascent crypto industry.

The chapter of the BIS report on the future monetary system was officially released on Tuesday of this week, with a particular comment from the BIS General Manager, Agustín Carstens, which caught the attention of the crypto community:

“My main message today is simple: the soul of money belongs neither to big technology nor to an anonymous ledger. The soul of money is trust.

‘A Legacy Institution’

According to Ben Caselin, Head of Research and Strategy at crypto exchange AAXthe BIS with its corresponding report and comment underlines that it is “a protective legacy institution and in favor of a legacy vision of digital money”.

“When it comes to the ‘soul of money’ there can be no neutrality and the latest BIS report underscores that,” Caselin said. cryptonews.com.

He added that the fiat system is already suffering from “currency debasement and arbitrary policy changes.” Central bank digital currencies (CBDCs) are an effort to keep this going for longer, with additional risks around “privacy, financial autonomy and ultimately inclusion,” he said.

Furthermore, the head of research at AAX noted that Bitcoin (BTC), as an alternative to CBDCs, continues to be adopted in both developed and emerging markets. And according to Caselin, those who adopt BTC also see it “as protection against oppression and violence.”

“Embracing a non-sovereign currency that is not controlled by a single entity and cannot be claimed by any particular country allows people to reimagine and redefine citizenship and allows them to take basic but fundamental values ​​and rights in the new digital economy that it’s coming”. Caselin said.

Crypto is still in ‘testing phase’

According to the cryptocurrency broker overall block analyst Marcus Sotiriou, the new BIS report is right on some points, such as the importance of security and stability for a global monetary system.

However, what the report fails to acknowledge is that the crypto industry is only 13 years old and that “we are still going through the testing phase,” Sotiriou said. cryptonews.com.

“There will be many failed projects, as we have seen with the UST stablecoin, but this is part of the natural selection process. We can compare this to the dot-com bubble, where most technology companies failed, but some became the largest and most innovative companies in the world today,” he said.

This week, a similar statement was made even by Bank of England Lieutenant Governor Jon Cunliffe, who also compared the current crash to the dot-com boom.

“Many companies left, but the technology did not disappear. It came back 10 years later, and those that survived, the Amazon and the eBay — turned out to be the dominant players,” he was quoted as saying by Bloomberg.

Meanwhile, Sotiriou added that although Bitcoin points to a role as global money for the Internet, “most cryptocurrencies are not meant to be money.”

Instead, they purport to be an asset used to operate a particular blockchain network, which in turn “solves a unique problem,” he said. “The reason most crypto assets have value is because of the growth of the networks they are used on, rather than how well suited they are to a monetary system.”

Lastly, Sotiriou noted that while there are “many downsides” to DeFi today, the report fails to acknowledge its “revolutionary benefits.”

“There are over a billion people in the world who are unbanked, and decentralized finance can be a solution for these people, many of whom have internet access to use crypto instead of a bank,” the analyst said. from GlobalBlock.

Learn more:
– CBDCs are likely to make you less anonymous
– Central banks struggle with privacy-related CBDC headaches

– Bitcoin is more ‘public’ money than fiat currencies issued by the central bank

– Why fiat currency is more confusing than cryptocurrency
– How and Why Crypto Suffers Raw Treatment from Regulators, Politicians and the Media

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