![]() ![]() “Because they share a common ledger, they can be brought together and used in an efficient way, through smart contracts. “CBDCs and tokenized deposits would appear in separate partitions in the unified ledger,” Carstens said. This is where the creation of a unified ledger comes into play. In his understanding, CBDCs and tokenized deposits are not new types of money they simply “replicate existing forms of money in a technologically superior way.” He sees CBDCs playing the role that central bank money plays in the current system, while tokenized deposits will serve as commercial bank money. The aim is to tap into private sector creativity and ingenuity to develop new products and services.” “So, a guiding principle for the unified ledger is to preserve this partnership between the central bank and the private sector. While the central bank has an important role to play in the governance of a unified ledger, it would do so “in partnership with other public agencies as well as with private sector participants,” Carsten noted. ![]() Carstens said this “reduces the need for manual interventions that delay transactions and reduces dependency on intermediaries, and also allows for simultaneous and near-instant payments and settlement.” ![]() These new functionalities would allow the automation and seamless integration of any sequence of transactions using programmable money. Composability means that many smart contracts, covering multiple transactions and situations, can be bundled together, like ‘money lego.’” “A smart contract is a computer program that executes conditional "if/then" and "while" commands. “Such a ledger allows for the use of smart contracts and composability,” Carstens elaborated. The creation of a unified ledger would allow the various components to work seamlessly together, he explained, while its open architecture would promote financial inclusion and greater competition. This system would also rely on the central bank for “underpinning the trust in money.” He defined a unified ledger as “a digital infrastructure with the potential to combine the monetary system with other registries of real and financial claims,” and said that it would need to be established as a public-private partnership with a clear division of roles. In this regard, there is great promise in developing the idea of a "unified ledger" with a common programming environment,” he said. “To fully realize the transformative potential of these new financial technologies, we need some way to bring them all together. The BIS chief went on to say that “Only the legal, historical infrastructure behind central banks can give great credibility” to money, and thinks that crypto is a financial activity that can really only exist “under certain conditions.” He anticipates a “strong statement” from the Group of 20 for strengthened regulation of the digital asset sector.ĬBDCs and the creation of a unified ledgerĪlso on Wednesday, Carstens gave a speech to the Monetary Authority of Singapore (MAS), during which he delved into the topic of central bank digital currencies (CBDCs), tokenized assets, including tokenized deposits, and the creation of a fast payment system that can facilitate cross-border transactions.Ĭarstens called for the creation of a “unified ledger” to help facilitate the integration of new technologies into the existing financial infrastructure. (Kitco News) - Agustin Carstens, the head of the Bank for International Settlements (BIS), has declared victory in the battle between cryptocurrencies and fiat currencies, saying that “That battle has been won” during an interview with Bloomberg TV on Wednesday.Īccording to Carstens, the events of 2022 – which resulted in more than $2 trillion in value disappearing from the crypto market – prove the argument that crypto is a viable alternative to fiat currency has been settled, noting that “A technology doesn’t make for trusted money.” Editor's Note: With so much market volatility, stay on top of daily news! Get caught up in minutes with our speedy summary of today's must-read news and expert opinions. ![]()
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