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Top crypto critic Is Against Central Banks Issuing Their Own Digital Tokens

One of the top crypto critics of our time is very opposed to the idea of central banks issuing their own virtual tokens better known as CBDC.

Agustin Carstens who is the general manager at the bank of International Settlements highlighted the risks central bank’s virtual coins could pose to the general public insisting that they would undermine both the financial stability and the monetary policymaking.

Carstens has been a stern crypto critic over the years and at one time compared Bitcoin to “a bubble, a Ponzi scheme and an environmental disaster.” The warning was made earlier today in a speech in Dublin.

He also said if central banks are to go ahead and offer their own digital currencies then it wouldn’t be too far fetched to imagine a situation where in case of a financial panic people would shift their money to accounts at the monetary authority from commercial banks, and this would undermine the system.

According to Carstens, other potential downsides of CBDCs include changes to how interest rates will affect the public’s demand for money. This will lead to a bigger central bank balance sheet that could see a buildup of assets and negatively impacting the financial market liquidity.

In the speech that was given at the Central Bank of Ireland, the general manager noted:

“There are huge operational consequences for central banks in implementing monetary policy and implications for the stability of the financial system. Central banks do not put a brake on innovations just for the sake of it. But neither should they speed ahead disregarding all traffic conditions.”

The surge of crypto popularity coupled with the drastic drop in use of cash payments in some countries like Sweden has raised the question if central banks should consider supplementing their existing offer of bank notes with virtual tokens.

However, it seems Carstens has nothing to worry about as regulators are progressing slowly in this area. According to a BIS report, there is only a handful of central banks that are expected to issue their digital tokens in the next decade.

Do you agree with this crypto critic when he says central banks should avoid issuing their own digital tokens? Share your thoughts in the comment section below.

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Basil has three years of freelance experience writing on disruptive technologies. He focuses on breaking news and education pieces; helping to spread the gospel of Blockchain. He hopes to have his own blockchain company one day; helping the world through its innovative ledger technology.

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