Augustín Carstens of the Bank for International Settlements is wary of untested tech and payment system chaos.
Augustín Carstens, the head of the Bank for International Settlements (BIS), has once again claimed that digital currency is a non-starter and, worse, a likely panic accelerant in the event of another global financial crisis. BIS is called the "central bank for central banks" because it provides banking services to institutions such as the European Central Bank and the Federal Reserve. In February, Carstens called[1] bitcoin a "combination of a bubble, a Ponzi scheme, and an environmental disaster." In a lecture[2] at Goethe University in 2018, Carstens said that "the rise of cryptocurrencies only highlights the important role central banks have played, and continue to play, as stewards of public trust."
Addressing colleagues at the Bank of Ireland on March 22 of this year, Carstens offered[3] that central bank digital currencies (CBDC) would come into play – hypothetically – if a major cryptocurrency were to be widely recognized as a means of payment. "A CBDC would allow ordinary people and businesses to make payments electronically using money issued by the central bank. Or they could deposit money directly in the central bank, and use debit cards issued by the central bank itself." And that would be unfortunate, in his mind, because it would encourage people to stop making payments with a debit card tied to a commercial bank account.
Undesirable Consequences
The argument is not that banks are angelic or infallible. Rather, Carstens is worried because "the [traditional] monetary system is the backbone of the financial system." By financial system, he means the whole enchilada: central financial authority, regulators, payment systems, commercial banks, fiat, custodians, etc. "Before
