Bank for International Settlements Urges G20 to Dismiss Crypto

The Bank for International Settlements (BIS) has told the
Group of Twenty (G20), the intergovernmental forum comprising the world’s top
19 economies, and the European Union, that cryptocurrencies cannot be adopted
as a monetary instrument because they have ‘inherent structural flaws’.

In a report submitted to
the G20 Finance Ministers and the Central Bank Governors, the BIS stated in
detail the flaws facing digital assets, among them instability and
inefficiency. The BIS, which brings together the world’s major central banks, added
that there is a lack of accountability in the cryptocurrency ecosystem.

“Crypto has so far failed to harness innovation to
the benefit of society,” the BIS stated. “Crypto does not finance
any real economic activity. Additionally, it suffers inherent shortcomings
related to stability and efficiency, as well as accountability and integrity.”

Conversely, in the
report, the BIS acknowledged that cryptocurrencies had an element of genuine
innovation like programmability, which enables the automation of transactions
and integration into other systems. According to international financial
institutions, such aspects, when combined with asset tokenization
Tokenization

Tokenization represents the process of substituting a sensitive data element with a non-sensitive equivalent, i.e. token, which bears no extrinsic or exploitable meaning or value. In essence, the rights to the ownership of an asset are converted into a digital token. Tokenization can be used to own an entire unit of an asset. For example, one token that represents the ownership of a piece of real estate or to split ownership of a single unity of an asset such as 200,000 tokens, each one represen

Tokenization represents the process of substituting a sensitive data element with a non-sensitive equivalent, i.e. token, which bears no extrinsic or exploitable meaning or value. In essence, the rights to the ownership of an asset are converted into a digital token. Tokenization can be used to own an entire unit of an asset. For example, one token that represents the ownership of a piece of real estate or to split ownership of a single unity of an asset such as 200,000 tokens, each one represen
Read this Term, can reduce transaction costs.