Central banks have to "act now" because of the crypto boom, says Benoît Coeuré


Stablecoins and decentralized finance will challenge banks' business models and monetary authorities need to act faster to develop official digital assets, veteran politician Benoît Coeuré said in a speech on Friday.

Comments from Coeuré, a senior official at the Bank for International Settlements and a former board member of the European Central Bank, underscore the growing concern of tax authorities over the boom in cryptocurrencies and other digital financial innovations.

Coeuré said both decentralized financial firms and stablecoins - a store of value in the digital asset market - pose a threat to custodians and intermediaries such as banks. Central banks and financial regulators now face pressing questions about how to respond, he told the Eurofi conference.

" have a task to perform - to ensure price stability and financial stability - and they have to retain their ability, ”said Coeuré in a speech entitled Digital Currency of the Central Bank: The future begins today. " must act while the current system is still in place - and act now. "

Coeuré, who leads research on central bank digital currencies for the BIS, urged policymakers to speed up their response to the cryptocurrency threat and speed up their work on digital assets backed by national policymakers, otherwise they will speed up theirs Lose a key role in the financial system.

"The time for the central banks is over," said Coeuré. “It will take years for central banks to adopt digital currencies while stablecoins and cryptoassets are already in place. It is all the more urgent to start with it. "

He also said that central banks and regulators need to consider the role banks will play after the advent of central bank digital currencies and the role of intermediaries in a digital financial system, as well as the implications of the design of these new assets.

Coeuré said central banks are viewing traditional financial firms as part of the new digital currency payments infrastructure. "But make no mistake: global stablecoins, DeFi platforms and big tech companies will still question the banking models," he said.

Large central banks have been slow to respond to the challenge of Bitcoin and other private digital assets, unlike policymakers in developing countries, where projects around central bank-backed digital currencies are at an advanced stage.

In China, the digital version of the renminbi is already in the testing phase and will be introduced as part of the government experiment with centralized cryptocurrencies at the upcoming Olympic Winter Games in Beijing.

In contrast, in July this year the ECB began the investigation phase of a digital euro project, and the US Federal Reserve has not yet decided whether to proceed with a digital version of the world's leading currency reserve.

https://dailyaffiliatemarketingnews.com/central-banks-have-to-act-now-because-of-the-crypto-boom-says-benoit-coeure/

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