In its ongoing efforts to define the ideal future monetary system, the Bank for International Settlements (BIS) has identified the superiority of the crypto ecosystem over the modern fiat economy when it comes to achieving policy goals.
Sharing your vision For the future monetary system, BIS has outlined eight high-level goals that it hopes to achieve: security and stability, accountability, efficiency, inclusiveness, user control over data, integrity, adaptability, and openness. In its study, BIS found that the crypto ecosystem outweighs traditional finance when it comes to broadly fulfilling policy goals.
The above table published by BIS shows that the modern fiat economy is far from meeting the requirements of an ideal monetary system. The report awards points to the fiat ecosystem for security and stability policies, while emphasizing that “public oversight has helped create secure and reliable payment systems.”
The crypto ecosystem, however, has generally met two of the eight policies set by the BIS – adaptability and openness. In addition, the report proposes improvements in terms of enabling policies and user control over data policies, which will result in the crypto ecosystem meeting half of the BIS recommendations for an ideal monetary system.
BIS is currently betting on the rise of central bank digital currencies (CBDC) to counter the massive adoption of cryptocurrencies. His vision for the future of the monetary system includes the use of several CBDC mechanisms with new data architectures that provide better privacy and control when serving those who are not banked.
BIS Innovation Center recently shared plans to launch a market intelligence platform in response to the collapse of numerous stablecoin projects and decentralized finance (DeFi) lending platforms. The platform aims to serve as an alternative to unregulated firms for providing data on asset collateral, trading volumes and market capitalization.
Bank of Israel experiments with central bank smart contracts in digital currency and privacy
The Bank of Israel recently launched its first technology experiment with CBDC, which explored user privacy and the use of smart contracts in payments.
Although the experiment was fraught with many technical challenges, it also revealed the need for a Know Your Customer system and an anti-money laundering system through a centralized database.
Credit : cointelegraph.com