Towards Financial Innovation Without Stablecoins

BIS general manager imagines financial innovation without stablecoins

Innovation and the future of the monetary system. Speech by Mr Agustín Carstens, General Manager of the BIS, Singapore, 22 February 2023.

The turmoil in crypto markets has erased the Bank of International Settlements’ belief that there is any hope that stablecoins would be the future of money, according to the financial institution's chief, Agustin Carstens. Yet, he sees central bank digital currencies and tokenized deposits as essential for innovation in finance.

“CBDCs replicate existing forms of money in a technologically superior way,” Carstens said in a speech at the Monetary Authority of Singapore. The Swiss-based global institution for financial regulators is also actively experimenting with tokenized deposits, which are meant to replicate the role of commercial bank money, he noted.

I don't see how tokenised deposits are any different to collateralised money... unless CBDCs wish to emulate the US Fed and go for a zero-reserves policy, thereby actually increasing the likelihood of private money - except this will be bankster private money and not some arriviste stablecoin issuer.

As accountable public institutions, central banks strive to serve the public interest rather than private profits.

Not true! Most central banks are private entities pretending to serve the public.

Around the world, central banks are exploring how to give money new capabilities.

Now that is true; the devil is in the details. New capabilities means programmable money - surveillance finance. How to implement that by stealth is the whole of the game.

Central banks have often said that they would rather not deal with the individual directly, hence discussions are all about how to keep control while leaving a chain long enough to simulate some freedom.