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BIS Economists Recommend 3 Crypto Programs for Controllers Worldwide to Follow

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1 year ago

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Economists at the Bank of International Settlements( BIS) have recommended three programs controllers worldwide could adopt in order to deal with the pitfalls posed by cryptocurrencies. “ Authorities can now consider a variety of policy approaches and at the same time work to ameliorate the financial system in the public interest, ” they advised.

BIS Economists bandy Crypto Policies

The Bank of International Settlements( BIS) published a bulletin last week named “ Addressing the pitfalls in crypto laying out the options. ”

Penned by BIS economists Matteo Aquilina, Jon Frost, and Andreas Schrimpf, the report discusses the pitfalls associated with cryptocurrencies and the colorful options available to controllers and central banks for addressing these pitfalls.

The authors outlined “ three implicit lines of action. ” The first is to “ ban specific crypto conditioning. ” Another option is to “ insulate crypto from tradfi( traditional finance) and real frugality. ” The third is to “ regulate the sector in a manner akin to tradfi. “Still, the report clarifies that the three options aren’t mutually exclusive and could be “ widely combined to alleviate the pitfalls expiring from crypto conditioning. ”

While noting that crypto requests “ have endured a remarkable series of thunderclaps and busts, frequently performing in large losses for investors, ” the BIS economists concluded that “ these failures have so far not revealed over to the traditional fiscal system or the real frugality. ” nevertheless, they advised

There’s no assurance that they won’t do so in the future, as defi( decentralized finance) and tradfi become more integrated.

“ Authorities can now consider a variety of policy approaches and at the same time work to ameliorate the financial system in the public interest, ” the BIS report concludes.

The post BIS Economists Recommend 3 Crypto Programs for Controllers Worldwide to Follow first appeared on BTC Wires.



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Israel, Hong Kong complete retail CBDC test emphasizing privacy, inclusivity

Published

8 months ago

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September 13, 2023

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The Bank for International Settlements and the central banks of Hong Kong and Israel released the results of Project Sela on Sept. 12. The project was a public-private partnership that used private intermediaries to create a retail central bank digital currency (rCBDC) combining the desirable characteristics of cash and the advantages of digitalization.

The project leveraged the central banks’ diverse experience to incorporate a number of predefined policy, security, technology and legal features. The private participants were fintechs FIS and M10 Networks, which provided core products, Clifford Chance for legal analysis and Check Point Software Technologies for cyber security. The project was a proof-of-concept.

In the Sela ecosystem, the central bank that issues an rCBDC maintains the ledger for it with pseudo-anonymous end-user accounts and provides instantaneous settlement with a real-time gross settlement (RTGS) system. Funding institutions manage users’ accounts and convert the rCBDC into and out of bank deposits and cash. An intermediary called an access enabler handles all customer-facing services, including Know Your Customer compliance, endorsements and routing, while end users maintain control over their electronic wallets with cryptographic keys.

Related: Hong Kong regulator eyes tokenization for bond market improvement: Report

One advantage of the ecosystem is its accessibility for the private financial institutions that carry out the unbundled financial services, which will purportedly increase competition and lead to increased user access. Access enablers do not create accounts, manage records or control money, reducing the regulatory requirements placed on them:

“Lower entry barriers can enable wider participation in the provision of rCBDC services, compared with the existing payments market, to include, for example, SMEs [small- and medium-sized enterprises], civil society and charitable organisations, e-commerce providers, community centres and technology companies, among others.”

Financial institutions are understood in the traditional sense of banks, credit unions and similar organizations. Thus, it does not lead to disintermediation. Project Sela rCBDC users would not have to be account holders to use the services of those institutions to convert an rCBDC to or from cash. Payments are settled by the central banks, and users control their money the whole time. The central bank participants are assumed to be the operators of the distributed ledger system.

A system weak point noted in the report is RTGS systems, since they are usually not available around the clock and are not designed for frequent small transactions. Potential technical solutions are discussed.

Magazine: Ripple, Visa join HK CBDC pilot, Huobi accusations, GameFi token up 300%: Asia Express