Benoît Coeuré, a senior official at the Bank for International Settlements (BIS), said that central banks should move swiftly to counter the threat posed by private cryptocurrencies.
According to Coeuré, the current boom of the cryptocurrency industry poses a major threat to monetary authorities and existing banks’ business models, and as such traditional financial firms need to develop the right initiative to address the challenge.
Speaking at the Eurofi conference today as published by the Financial Times, Coeuré identified stablecoins and cryptocurrency-related firms as the major threat to the traditional financial industry.
“[Central banks] have a job to do — delivering price stability and financial stability — and they must retain their ability to do it. [They] have to act while the current system is still in place — and to act now,” Coeuré said.
Central Banks Should Swiftly Develop CBDCs
Coeuré, who is currently leading the BIS research team on Central Bank Digital Currency (CBDC), said there is a need for global central banks to hasten efforts toward launching digital assets that have the support of national policy makers.
This initiative will help central banks remain relevant in the global financial space, Coeuré added.
The former board member of the European Central Bank (ECB) added that there is no time for central banks to delay any further in developing CBDC, as private cryptocurrencies are already in existence and are growing in popularity by the day.
For Coeuré, aside from launching CBDCs, central banks still have other roles to play in maintaining their relevance in the financial sectors.
He noted that several countries’ apex banks should act as intermediaries in the crypto industry and also get involved in the development of new cryptocurrencies going forward.
Crypto Growth Forces Central Banks to Consider CBDCs
The cryptocurrency industry has continued to record major growth with coins like Bitcoin (BTC), Ethereum, and Solana (SOL), among others gaining popularity in recent times.
The growth of the crypto sector and the declining use of fiats in payments has prompted various central banks to consider launching CBDCs in order to remain relevant in the payment sector.
While other countries like China have already commenced trials for their CBDCs, others are still researching the possibility of launching the digital payment method.
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