Ultimate magazine theme for WordPress.

Banks want in on crypto


Global central banks may have to issue their own digital currencies sooner than expected now that Facebook has announced its plans to create its own crypto, according to Agustín Carstens, general manager of the Bank of International Settlements.

industries that global executives think are most advanced in blockchain development

Doing so would enable the public to directly access central bank money — a privilege only private sector lenders have at the moment. Additionally, Goldman Sachs wants to get in on blockchain and is conducting extensive research in tokenization, according to David Solomon, CEO of Goldman Sachs are looking at the potential of tokenization and stablecoins.

- Advertisement -

  • Big FIs are looking to enhance their operations using tokenized assets.Implementing blockchain solutions can help FIs cut costs and increase operational efficiency. It should be noted, though, that not all banks are in agreement on the advantages of using blockchain for payments networks.
  • And BIS can help central banks realize these projects with its new innovation hubs. The FI will set up innovation hubs in Basel, Singapore, and Hong Kong aimed at improving the global financial system, per Reuters. Moreover, the hubs will provide central banks with insights into technology trends affecting central banking and support them in terms of regulatory requirements and safeguarding financial stability systems.
  • And despite it being unclear whether there’s consumer demand for cryptos, banks need to launch their own digital currencies soon to stave off big tech. There’s no clear evidence yet that there’s demand for such currencies, especially since consumers can use conventional e-wallets from banks and fintechs instead of cryptos, so the value-add isn’t clear. However, as big tech firms begin encroaching on the space, banks should act now to avoid competitors gaining a dominant position.

The bigger picture: Even when banks have developed their own crypto projects, there are still two hurdles to overcome, namely regulation and creating a network effect.

  • More players looking to enter the crypto space will force regulators to up their game. There’s already more pressure to regulate the crypto industry thanks to Facebook’s announcement that it’ll be entering the space with Libra and a wealth of influential partners. However, as central banks and the likes of Goldman Sachs get in on crypto as well, there will be greater need for a clear regulatory environment. While regulators have so far been slow and reluctant to regulate cryptos, these developments will force them to take a closer look at the industry to ensure that players don’t pose a risk to financial stability. Solomon expects that there will be an evolution of regulation.

Leave A Reply

The team of DiaryCoin would like to keep you updated with the lastest crypto-news

Would you like to?