Digital currencies are a revolutionary tool that central banks should consider, but they remain far too risky to be used as legal tender any time soon, according to the Bank for International Settlements.
The BIS – the club of the world’s largest central banks – said in a report on Monday that the new form of money could one day be issued by policy makers for tasks such as settling payments among financial institutions. At the same time, it warned that digital coins might destabilise traditional lenders if offered widely to the general public.
“Technological developments have raised questions about the feasibility and desirability of combining distributed ledger technology with the trust inherent in fiat currencies to create a central bank digital currency available to all,” Mr Carney, who chairs the BIS’s Global Economy Meeting and the Financial Stability Board, said in a statement alongside the report. “The policy issues that this would raise, for central banks and society more generally, need careful consideration.”
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This post may contain excerpts from an article entitled “Central Banks Urged to Study Digital Currencies’ Cyber Risks” published in The Business Times on 14 March, 2018.