Financial and government institutions continue to dismiss crypto as a fad in public at the same time they are rushing to control and profit from the technology.
The head of the Bank for International Settlements, which coordinates financial policy of national and private banks around the world, is the latest to sound the alarm.
BIS’s Benoit Coeure says that national banks should start work on central bank digital currencies.
CBDCs are digital currencies that are issued and controlled by government banks.
In a 10 September speech to the European Financial Forum, Coeure urged national banks to start work or risk being left behind. “We should roll up our sleeves and accelerate our work on the nitty-gritty of CBDC design,” he said. “CBDCs will take years to be rolled out, while stablecoins and crypto-assets are already here. This makes it even more urgent to start.”
Additional support for digital assets comes from Rick Rieder, chief information officer of Blackrock, the world’s largest financial management firm.
The CIO says it makes sense to hold some Bitcoin in a personal investment portfolio – and disclosed that he has added the crypto to his own holdings.
“I like assets that are volatile that have upside convexity,” Rider said. “I could see Bitcoin go up significantly but I think it’s volatile.”
Bitcoin has become legal tender in El Salvador, where it drastically reduces the costs citizens pay to receive funds from relatives working in other countries. Experts estimate that Western Union and other funds-transfer companies stand to lose €340 million in transfer fees per year.
El Salvador may soon be joined by other countries that adopt crypto as an official currency.
In a recent survey, 48 percent of Brazilians say they would support making Bitcoin a national legal tender. And legislators in Panama are debating a resolution to make Bitcoin an official currency.
Meanwhile, a spokesman for president Vladimir Putin says the Russian government currently sees no value in adopting a cryptocurrency as legal tender.