Bitcoin’s volatile value makes it impossible to consider the crypto-asset a money, as stated by the Bank of International Settlement’s Benoit Coeure.
‘Bitcoin may be an investment instrument and it is not for me to judge on that or to counsel on that,’ the mind of the BIS Innovation Hub said in an interview with Bloomberg Television. ‘However, it’s failed the test of being a true money, and it’s failed the test of being a payment instrument — because the value is still going about a lot.
Coeure said it is important for global central banks to provide financial security to citizens and develop with safer options that reap the benefits of technological innovation. Many institutions are exploring prospects for issuing electronic versions of their currencies — a move that may shake up how money works while allowing them to retain control.
‘Central banks are focused on an instrument that would provide liquidity, which would provide safety, and that may be utilised as a product in the global payments system,’ Coeure stated in the interview. ‘That is the reason why we would like to look into central bank electronic money. Crypto has its own place under the sun, but it’s different — it’s not a payment tool.
President Christine Lagarde said at a BIS occasion on Thursday that financial authorities should keep up with the accelerated pace of invention, and among her colleagues sought to push against concerns it’ll come at a cost.
‘As long as there is cash, people may continue to hold it at a rate equivalent to zero,’ they said. The ECB also would not want to draw significant amounts of deposits off from banks as it does not have any interest in’rebuilding the European monetary system.