Crypto-assets have “intrinsic flaws” and are unsuitable as currencies: BIS | CoinDesk JAPAN | Coin Desk Japan

The Bank for International Settlements (BIS) said in a report it sent to the finance ministers of the world’s 20 largest economies (G20) that crypto-assets (virtual currencies) have “intrinsic structural flaws” and that currency said to be inappropriate.

A report by the BIS, a group of the world’s leading central banks, cites volatility, inefficiency and accountability issues that outweigh potential innovation benefits such as automated payments.

“Crypto assets have so far failed to harness innovation for the benefit of society,” said this weekend, despite millions of individual and institutional investors involved in this growing sector. According to a report prepared for the G20 Finance Ministers and Central Bank Governors meeting in Gandhinagar, India, on

“Crypto assets are still self-referential and do not fund real economic activity,” the report adds. “They are inherently structurally flawed, making them unsuitable for a significant role in the monetary system.”

The report comes after a turbulent year for crypto. The report cites losses from the collapse of the FTX and Terra ecosystems, hacking and lag-pull risks, and problems scaling to the scale required for a full-fledged payment system.

Central bank skepticism about crypto is nothing new, as new payment systems threaten to disrupt or replace traditional fiat currencies.

Members of the G20 appear wary of stablecoins, crypto assets that are tied to the value of fiat currencies, as their impact on centralized monetary policy could be more pronounced in emerging markets.

｜Translation: CoinDesk JAPAN
｜Editing: Toshihiko Inoue
| Image: Bank for International Settlements (Fred Romero/Flickr)
｜Original: Crypto Can’t Be Used as Money Due to ‘Inherent Flaws,’ BIS Tells G20