Bank for International Settlements: Cryptocurrencies - a flawed system, but tokenization promises change
Date: 2023-10-02 Author: Dima Zakharov Categories: BLOCKCHAIN
Bank for International Settlements and the Prospects of Digital Assets
The head of the Bank for International Settlements' Innovation Center, Cecilia Skingsley, emphasized the importance of staying ahead in the field of financial innovation. The bank has been tasked with researching the impact of new technologies, including cryptocurrencies, on the operations of central banks. This recognition highlights that digital assets have become an integral part of the financial system, demanding attention even from esteemed institutions like the Bank for International Settlements.
The events related to the Libra project in 2019 and subsequent actions compelled the global financial community to contemplate the significance of technological changes. It served as a signal to banks that ignoring digital assets is no longer an option. This underscores the importance of cryptocurrencies and their influence on the future of the financial system.
Cryptocurrencies and Tokenization: Prospects and Limitations
Researchers at the Bank for International Settlements have discovered that tokenization, the technology of representing real assets in digital form, holds significant potential to enhance the efficiency and transparency of financial markets. This can contribute to improving data processing and transmission, which will be a key factor in the future financial system.
However, despite the potential of tokenization, researchers also expressed doubts regarding cryptocurrencies. They believe that cryptocurrencies, as a digital currency system, have yet to demonstrate their value and stability. This might be associated with high volatility and various other factors that slow down their integration into everyday financial transactions.
The Path to the Future Monetary System: The Role of Central Banks and Blockchain Technology
Cecilia Skingsley underscored the importance of preparing central banks for new challenges and the necessity of changing infrastructure. This implies that central banks must be ready to implement new technologies that can enhance the efficiency of the financial system and ensure its stability.
Innovative research in blockchain and distributed ledger technology (DLT) also plays a crucial role in the future financial system. The New York Innovation Center is studying how distributed ledger technology can improve cross-border payments, promising to make them faster, simultaneous, and secure.
