BIS: Cryptos Have Lost the “Battle” Against Fiat Currencies

Agustin Carstens, the leader of the Bank for International Settlements (BIS), has stated that cryptocurrencies have failed in the “battle” against fiat currencies issued by central banks around the world. Speaking at the Monetary Authority of Singapore, Carstens highlighted the unreliability of stablecoins, which he claims lack the essential “institutional arrangements and social conventions.” He argues that only the legal and historical backing of central banks can lend significant credibility to currency. According to Carstens, cryptocurrencies have already been outperformed by national currencies such as the euro, pound, and yen, and he insists that merely having technology does not equate to “trusted money.”

During his address, Carstens referenced stablecoins, pointing out that they fail to guarantee the integrity of money. He believes that recent events have raised doubts about stablecoins’ capacity to serve as money. Carstens suggests that stablecoins depend on the trustworthiness of fiat currencies but with lesser regulatory safeguards, which prevents them from ensuring monetary unity. In contrast, he posits that central bank digital currencies could offer secure and stable monetary solutions.



Carstens concluded with a warning that financial incumbents, especially central banks, must engage in innovation. He asserts that if central banks do not innovate, others will take their place. Furthermore, he stresses the need to protect investors and consumers and to prevent stablecoins from causing fragmentation of the monetary system, which would compromise the cohesion of money.

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