{"id":34615,"date":"2023-07-12T10:02:25","date_gmt":"2023-07-12T14:02:25","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/crypto\/bank-for-international-settlements-rejects-crypto-as-money-in-report-to-g20\/"},"modified":"2023-07-12T10:02:26","modified_gmt":"2023-07-12T14:02:26","slug":"bank-for-international-settlements-rejects-crypto-as-money-in-report-to-g20","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=34615","title":{"rendered":"Bank for International Settlements Rejects Crypto as Money in Report to G20"},"content":{"rendered":"
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A new report from the Bank for International Settlements (BIS) has pointed to \u201cinherent structural flaws\u201d in crypto as the reason why it will never become money.<\/p>\n

In the report, the BIS made it clear that it believes crypto has problems related to its \u201cstability and efficiency,\u201d while also mentioning a lack of accountability and integrity as inherent flaws with crypto.<\/p>\n

The report, titled \u201cThe crypto ecosystem: key elements and risks,\u201d was prepared for a meeting of finance ministers in the G20, a group of the 20 largest economies in the world.<\/p>\n

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Crypto\u2019s rise<\/h2>\n

Despite doing its best to downplay the role that Bitcoin (BTC) or any other cryptocurrencies can play in the monetary system, the BIS report did acknowledge crypto\u2019s rise from a \u201cniche activity to something that impinges on the mainstream financial system.\u201d<\/p>\n

\u201cWhile initially it was the preserve of a small set of enthusiasts, millions of retail users as well as more and more institutional investors have entered the crypto ecosystem in recent years,\u201d the report said.<\/p>\n

\u2018Elements of genuine innovation\u2019<\/h2>\n

Further, the report\u2019s authors admitted that \u201csome elements of genuine innovation\u201d exist in crypto, including \u201cprogrammability\u201d of money.<\/p>\n

These innovations have the potential to offer new functionalities to money including ways to automate and seamlessly integrate sequences of financial transactions, the report said.<\/p>\n

The programmability concept is something the BIS appears to have found a particular interest in, and the same concept was also mentioned in a BIS report on unified central bank digital currencies (CBDCs) unveiled by the bank last month.<\/p>\n

But although the report recognized programmability and other innovations as \u201cgenuine,\u201d it also said that crypto, so far, has \u201cfailed to harness innovation to the benefit of society.\u201d<\/p>\n

\u201cCrypto remains largely self-referential and does not finance real economic activity,\u201d it added.<\/p>\n

Altogether, this means that crypto is \u201cunsuitable to play a significant role\u201d as money in the world, the BIS report concluded.<\/p>\n<\/p><\/div>\n