Report to the G20: Cryptocurrency cannot be considered a monetary asset
Report to the G20: Cryptocurrency cannot be considered a monetary asset
The specific characteristics of cryptocurrencies make them unsuitable for use as a monetary asset.
This was the message sent by the Bank for International Settlements (BIS) to the finance ministers of the G20, the world's twenty largest economies.
The BIS report states that the disadvantages of cryptoassets, such as instability, inefficiency, and lack of accountability, far outweigh the potential benefits associated with technological innovation, particularly automated payments.
According to Cryptonews, millions of investors, both retail and institutional, are already involved in the crypto sector. "Nevertheless, cryptocurrency has so far failed to harness innovation to the benefit of society," said a report by a financial body made up of representatives from the world's major central banks.
The findings will be considered by G20 bank governors and finance ministers when they meet in Gandhinagar, India, on July 15-16.
According to the report, "inherent structural flaws make it impossible for cryptocurrencies to play a role as money."
The report cites losses from the collapse of FTX and the Terra ecosystem, the risks of hacking and fraud, scaling issues, and the inability to become a full-fledged payment system.
The skeptical attitude of the world's largest banks towards cryptocurrencies is not a sensation; experts predicted such an attitude given that new payment systems based on cryptocurrencies could displace traditional fiat currencies issued by banks.
G20 members are very cautious about promoting cryptocurrency payments and settlements through stablecoins, which are tied to the value of fiat currencies, because of their impact on centralized monetary policy.
Earlier, it was reported that experts noted the negative impact of MiCA regulation on the European crypto market.
