They lost the battle against paper money

The argument is that Cryptocurrency is an alternative to buried fiat money After the turmoil that the digital asset sector experienced last year, according to Agustin Carstens, Director of the Bank for International Settlements.

(Read: Why the country is the only one in the region where inflation continues to rise).

“That battle has been won“One of the technologies is not reliably profitable,” Carstens said in a televised interview with Bloomberg Television on Wednesday.

It is still the digital asset sector He licks the wounds of the $2 trillion collapse and the collapse of Sam Bankman-Fried’s FTX exchange in November, which became one of the most high-profile corporate crime cases in US history.

bitcoin, for example, down 65% to $24,150 from a peak near $69,000 in 2021. The collapse of cryptocurrency and a series of related bankruptcies have undermined the claim that tokens can be trusted as stores of value and a medium of exchange.

(plus: EPM: Freeze Power Rate Options).

“Only the legal and historical infrastructure behind central banks provides much credibilityIn return for the money, Carstens said, adding that he expects a “strong statement” from the G20 to strengthen regulation of the digital asset sector.

The encryption sector is A financial activity that can only really exist “under certain conditions”, He said. Carstens also spoke at the Monetary Authority of Singapore and said central bank digital currencies, or CBDCs, and token deposits can help increase efficiency.

suggested modelA unified blockchain in a public-private partnership framework where the central bank maintains trust in CBDCs. In his speech, Carstens referred to private sector stablecoins. He said regulators need to ensure that stablecoins do not harm investors and consumers or fragment the monetary system.

(Read: Financial tips for taking a gap year).

Stablecoins are crypto tokens that are meant to have a fixed value, say $1, but some have exploded, causing losses to investors.

bloomberg