BIS report: Bitcoin is a failed payment instrument, stabilizing currency threatens financial stability

Author: Liang CHE

Source: than push bitpush.news

The Bank for International Settlements (BIS) published an investigation report on stable currency on the official website on Friday.

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According to the report, the payment system is in a state of constant change and innovation is widespread. In most cases, domestic payments are becoming more and more convenient, but there are still two major shortcomings in current payment systems: the inability to provide inclusive financial services to a large proportion of the world's population, and the inefficient transfer of personal cross-border transfers. In this context, the G-7 has established a Stabilization Coin Working Group to study the challenges, risks and benefits that stabilized coins may bring.

According to the report, Bitcoin and other early cryptocurrencies have failed as “tools for payment or value storage”, and the widespread use of asset-linked cryptocurrencies or stable currencies poses a growing threat to monetary policy and financial stability.

The widely used stable currency in the report is called “global stable currency”, which may attract users from different countries and have “significant adverse effects” on the current economic system. Also mentioned in the report,

"Early cryptocurrencies such as Bitcoin have large price fluctuations, limited scalability, complex user interfaces, and problems in governance and regulations. Therefore, they are mainly used by some investors and illegal activists. Tools, not as a means of payment."

According to the report, the classification of stable currencies (defined as equivalent currency, contract or property claims or asset rights of issuers) will remain a major legal issue. The impact of stable currencies on existing monetary systems such as wire transfers is not fully reflected.

Although stable currency may provide faster, cheaper and more inclusive payment methods, the report states that “they can only be launched if significant risks are addressed.”

In addition, the report said in a footnote that the Swiss Financial Market Regulatory Authority (FINMA), which manages the Geneva-based Libra Association, agreed with the G7 proposal for a stable currency.

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Disclaimer: It is only the author's point of view and does not constitute investment advice. Investment is risky and at your own risk.