BIS urges central banks: Stabler currency, DeFi challenge traditional financial CBDC is the last hope

In a public speech last week, the head of the Bank for International Settlements (BIS) Innovation Centre called for immediate action by the world's central banks on cryptocurrencies and DeFi. He said: "CBDC will take years to launch, but with stablecoins and crypto assets already on the scene, the clock is ticking." Benoit Coeure, head of BIS innovation at


, speaking at the European Financial Services Think Tank (Eurofi) forum on Friday, said stabocoin, DeFi and payments innovations are all challenging the traditional financial system and countries need to step up and develop CBDC to deal with the digital future. The financial system is changing in front of us.

Coeure said he was concerned that big tech companies are expanding their retail payments business, staboin is seeking regulatory approval and DeFi continues to challenge traditional financial intermediaries: Stabocoins could develop into closed gardens, DeFi could create systemic risks to the collateral behind stabocoins, and the expansion of large tech companies in the financial sector creates Market power and privacy issues.

he asked the following questions:

* Will the new players in these markets complement or replace the banks?

* How should public and private money coexist in the new ecosystem?" "

* Should CBDC be used for DeFi more than private staboins?" "This is what the long-term future of the financial system looks like, but it is approaching at a breakneck pace," he said. "Central banks urgently need to understand these questions and THE CBDC will be part of the answer."

CBDC is the Hope of retaining traditional finance

"Banks will be concerned about the impact of CBDCS on public deposits, but a well-designed CBDC will be a secure, neutral method of payment and settlement, in addition to an open financial architecture, It can integrate in the face of competition and new innovation.

Coeure said central banks were too slow to act and the time for such a move has long passed, which is why central banks must step up efforts to develop CBDCS and focus on the details of their design to achieve price and financial stability. "The ultimate goal of the CBDC is to preserve the best elements of the current financial system while also providing a safe space for future innovations, so central banks need to act now while the system is still in place," he said.