Crypto Adaptability and Openness Key to Ideal Monetary System, Says BIS Leaders

Some of the biggest flaws preventing the adoption of current cryptocurrencies, pointed out by BIS leaders, are bottleneck congestion. throttling in DeFi and dependence on volatile assets.

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Governments around the world are looking to Central Bank Digital Currencies (CBDCs) as a way to enhance the existing fiat ecosystem. Cryptocurrency technical prowess backed by underlying central bank confidence is key to enabling a rich monetary ecosystem, suggests a publication from the International Monetary Fund (IMF).

“Digital technologies promise a bright future for the monetary system,” reads the publication attributed to IMF Deputy Managing Director Agustín Carstens and BIS leaders Jon Frost and Hyun Song Shin.

A June BIS study found that cryptocurrencies outperform fiat ecosystems when it comes to achieving the high-level goals of a future monetary system.

Some of the most important Flaws preventing current cryptocurrencies from mainstream adoption, highlighted by BIS leaders, are bottleneck congestion in decentralized finance (DeFi) and reliance on volatile assets .

The wholesale and retail can potentially inherit capabilities from the crypto ecosystem that benefit end users, the post pointed out:

"By embracing the core of trust provided by central bank money, the private sector can adopt the best new technologies to foster a rich and diverse monetary ecosystem."

He further recommended that central banks use innovations such as tokenization to enable purchases using multiple fiat currencies, further benefiting merchants and customers.

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