Since Bitcoin made a foray into the mainstream consciousness, taking much of the world by a proverbial storm, many optimists have claimed that cryptocurrencies could become the next ubiquitous medium of value. A recent survey conducted by the Switzerland-based Bank of International Settlements (BIS), the so-called “central banks’ central bank,” claims that these hopes are baseless.
Central Banks Overtly Skeptical Of Crypto
The South China Morning Post recently reported that respondents — leading central banks — to a BIS survey were skeptical of crypto’s potential. The outlet, who got its hands on the data, claimed that more than half of 63 respondents claimed that cryptocurrencies were used only “trivially,” or weren’t actively utilized at all.
28% of surveyees claimed that blockchain-based assets were solely used by niche groups — like the swelling number of Bitcoin proponents and the financially marginalized (many of which don’t have access to proper services).
Those surveyed purportedly stated that the lack of cryptocurrency adoption can be chalked up to retailers’ hesitance to accept this nascent form of money, regulatory uncertainty, public skepticism regarding Bitcoin, and flat-out bans/stringent restrictions in some nations.
And while the BIS survey purportedly revealed that central banks are garnering the authority to offer in-house crypto assets, or are working on blockchain-related projects, respondents claimed that they are unlike to issue a sovereign digital currency “for wholesale settlement” in the next three years.
Honestly Not Too Much A Surprise
To be honest, if we’re being frank here, it shouldn’t come as much of a surprise that central banks seem to be somewhat skeptical of digital currencies. The fact of the matter is that for the most part, save for entirely-controlled non-analog payment networks (think PayPal, WeChat Pay, amongst others), digital currencies could rapidly become a looming threat to centralization — which incumbents obviously want to keep in place.
Bitcoin, the de-facto crème de la crème of cryptocurrencies, is inherently borderless, decentralized, non-inflationary, a viable store of value, portable, and multi-faceted. In the eyes of decentralists and pro-crypto commentators, BTC is the exact opposite of fiat currencies.
So why would a government advocate for something, much less money itself, that undermines their hegemony?
They won’t, obviously.
So, with the monumental rise of cryptocurrencies and decentralized technologies, governments have likely begun to quake in their boots, hence the lack of regulatory clarity.
Former U.S. Federal Reserve chair Janet Yellen was overtly skeptical of government-issued currencies. Per previous reports from Live Coin Watch, Yellen, who held office during a portion of Obama’s presidency, noted that while a number of global governments are pondering the idea of government-issued crypto, the U.S. isn’t all too enthusiastic about launching such a venture.
The former economics professor added that with government-issued cryptocurrencies, there’s still an “enormous” risk of anonymity and how that specific feature could impact the project itself.