Central Bankers’ Attack on Crypto is ‘a Legacy Vision’, Failure to Recognize ‘Revolutionary Benefits’ of DeFi

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As the Bank for Inter­na­tion­al Set­tle­ments’ (BIS), also known as “the cen­tral bank of cen­tral banks,” tried to monop­o­lize trust in mon­ey with its new report this week, ana­lysts stress that it sim­ply rep­re­sents “a lega­cy vision” that brings a num­ber of new risks, and the BIS fails to rec­og­nize “rev­o­lu­tion­ary ben­e­fits” of the still-nascent cryp­to industry.

The BIS report’s chap­ter on the future mon­e­tary sys­tem was offi­cial­ly unveiled on Tues­day this week, with one par­tic­u­lar com­ment from BIS Gen­er­al Man­ag­er Agustín Carstens receiv­ing atten­tion from the cryp­to community:

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

‘A legacy institution’

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

“When it comes to the ‘soul of mon­ey’ there can be no neu­tral­i­ty and the lat­est report by BIS under­scores this,” Caselin told Cryptonews.com.

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

More­over, AAX’s research head point­ed out that Bit­coin (BTC) – as an alter­na­tive to CBD­Cs – con­tin­ues to see adop­tion in both devel­oped and emerg­ing mar­kets. And accord­ing to Caselin, those who adopt BTC also see it “as a hedge against oppres­sion and violence.”

“Adopt­ing a non-sov­er­eign cur­ren­cy that is not con­trolled by any sin­gle enti­ty and that can­not be claimed by any sin­gle coun­try allows peo­ple to reimag­ine and rede­fine cit­i­zen­ship and enable them to take basic but core val­ues and rights into the new dig­i­tal econ­o­my ahead,” Caselin said.

Crypto is still in ‘testing phase’

Accord­ing to cryp­to bro­ker Glob­al­Block ana­lyst Mar­cus Sotiri­ou, the new report from the BIS is right on some points, such as the impor­tance of safe­ty and sta­bil­i­ty for a glob­al mon­e­tary system.

What the report fails to rec­og­nize, how­ev­er, is that the cryp­to indus­try is just 13 years old, and that “we are still going through the test­ing phase,” Sotiri­ou told Cryptonews.com.

“There will be many project fail­ures, like we have seen with UST sta­ble­coin, but this is part of the process of nat­ur­al selec­tion. We can com­pare this to the dot­com bub­ble, where most tech­nol­o­gy com­pa­nies failed but some became the biggest and most inno­v­a­tive com­pa­nies in the world today,” he said.

This week, a sim­i­lar state­ment was made even by Bank of Eng­land Deputy Gov­er­nor Jon Cun­liffe, who also com­pared the cur­rent crash with the dot­com boom.

“A lot of com­pa­nies went, but the tech­nol­o­gy didn’t go away. It came back 10 years lat­er, and those that sur­vived — the Ama­zons and the eBays — turned out to be the dom­i­nant play­ers,” he was quot­ed as say­ing by Bloomberg.

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

Instead, they aim to be an asset used to oper­ate a par­tic­u­lar blockchain net­work, that in turn “solves a unique prob­lem,” he said. “The rea­son why most cryp­toas­sets have val­ue is because of the growth in the net­works they are used on, rather than how suit­able they are for a mon­e­tary system.”

Last­ly, Sotiri­ou not­ed that although “many draw­backs” to DeFi exist today, the report fails to rec­og­nize its “rev­o­lu­tion­ary benefits.”

“There are over 1 bil­lion peo­ple in the world who are unbanked, and decen­tral­ized finance can be a solu­tion for these peo­ple, many of whom have access to the inter­net to use cryp­to instead of a bank,” the Glob­al­Block ana­lyst said.

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Learn more: 
- CBD­Cs Are Like­ly to Make You Less Anony­mous
- Cen­tral Banks Strug­gle With Pri­va­cy-Relat­ed CBDC Headaches

- Bit­coin Is More ‘Pub­lic’ Mon­ey than Cen­tral Bank-Issued Fiat Currencies

- Why Fiat Cur­ren­cy Is More Con­fus­ing Than Cryp­to
- How and Why Cryp­to Suf­fers from Unfair Treat­ment by Reg­u­la­tors, Politi­cians & Media

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