Benoît Coeuré said the central bank must “act now” to respond to the cryptocurrency boom
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Senior policymaker Benoît Coeuré said in a speech on Friday that stablecoins and decentralized finance will challenge the business model of banks, and that monetary authorities must act faster to develop official digital assets.
The comments of Coeuré, a senior official of the Bank for International Settlements and a former member of the Executive Committee of the European Central Bank, highlighted the growing anxiety of financial authorities about the prosperity of cryptocurrencies and other digital financial innovations.
Coeuré said that decentralized financial companies and stablecoins-a store of value in the digital asset market-both pose a threat to intermediaries such as depository institutions and banks. He said at the Eurofi conference that central banks and financial regulators are now facing urgent issues of how to respond.
“[Central banks] There is a work to be done-to achieve price stability and financial stability-they must maintain their own capabilities,” Cole said at a time ” Central bank digital currency: the future starts today“[They] Action must be taken while the current system is still in existence-and act now. “
Coeuré, who is leading the central bank’s digital currency research for BIS, urges policymakers to speed up their response to the threat of cryptocurrency and accelerate their work on digital assets supported by national policymakers, otherwise they will lose their key role in the financial system .
“The time for the central bank to act has passed,” Coeuré said. “The central bank’s digital currency will take years to launch, and stablecoins and encrypted assets have emerged. This makes the beginning even more urgent.”
He also said that central banks and regulators need to consider what role banks will play after the emergence of central bank digital currencies, the role of intermediaries in the digital financial system, and the impact of these new asset designs.
Coeuré stated that the central bank treats traditional financial companies as part of the new digital currency payment infrastructure. “But please don’t get me wrong: In any case, global stablecoins, DeFi platforms, and large technology companies will challenge the banking model,” he said.
Compared with policymakers in developing economies, major central banks have been slow to respond to the challenges of Bitcoin and other private digital assets, and digital currency projects supported by central banks are at an advanced stage.
In China, the digital version of the renminbi is already in the experimental stage and will be launched at the upcoming Beijing Winter Olympics as part of the government’s centralized cryptocurrency experiment.
In contrast, the European Central Bank launched the investigation phase of the digital euro project in July this year, and the U.S. Central Bank has not yet decided whether to advance the digital version of the world’s primary reserve assets.