In a move that could be seen as a challenge to the freedom of the cryptocurrency world, the Bank for International Settlements (BIS) has launched an audacious blueprint for the implementation of central bank digital currencies (CBDCs).
The BIS’s latest annual economic report is full of buzzwords from the blockchain and smart contract universe. However, it claims that to truly capitalize on the potential of tokenized fiat currency, a privately controlled and unified system is necessary – a clear contradiction to the very essence of decentralized cryptocurrencies.
The report provocatively states, “A unified ledger could harness programmability to enable arrangements that are currently not practicable, thereby expanding the universe of possible economic outcomes.” Essentially, this means creating a web of purpose-built ledgers that can interact with each other. All under the watchful eye of a centralized authority, of course.
Not missing an opportunity to cast aspersions on the crypto industry, the BIS has openly criticized attempts to build decentralized value systems that operate independently of banks, politicians, and intermediaries. They argue that cryptocurrencies are inherently flawed and can’t replace traditional money due to their lack of connection with the ‘real world’ and the absence of trust.
In pointing out the disjointed “silos” that have resulted from banking industry efforts to tokenize fiat currency, the BIS seems to be advocating for a system that restricts global financial power within a centralized framework. While they call their CBDC blueprint “game-changing,” the question remains whether this game is one where everyone can play, or only those holding the keys to the central banks.