The cryptocurrency market has always been the subject of speculation and the concept of trust has been very difficult to establish. This has forced many institutions within the space to work together and come up with solutions.
According to recent reports, the Bank of International Settlements [ BIS ] is planning to submit a Cryptocurrency Roadmap to the G20 to lower cross-border transaction costs.
During the weekend this decision was announced with the bank saying it was high time institutions took a proper look at the crypto industry. Today, cross-border payment systems are operating in a slow and cumbersome manner and companies like Ripple were planning to change that.
This is the first time that such a large group of world leaders will be subject to developments in the cryptocurrency space and how to deal with them.
The Bank of International Settlements has urged members of the G20 to get behind its plan to reduce growing transaction costs in a faltering economy. High costs, low speeds, and cumbersome processes have been some of the biggest enemies of the current cross-border transaction system.
According to the bank, several regulators, central banks and treasury officials had put their heads together to come up with a solid plan.
Agustin Carstens, the General Manager of BIS had said:
“Central banks have a core role in payment systems. The changes under way require them to step up and play a more significant part in improving the safety and efficiency of these systems. Money and payment systems are founded on trust in the currency – whether cash or digital – and this trust is something that only the central bank can ensure.”
The body recognized that cross border payments were important for growing economies and the issue was of utmost importance. The roadmap will look into current costs, risks involved in crypto and the ways in which the public and private sectors could be involved.
The BIS acts as an umbrella group for a large group of banks and the jump into crypto meant that more and more players were getting interested in the field of digital assets.
For the first time, the BIS dedicated all of its time for a quarterly review to discuss the issuance of Facebook’s Libra. The Basel based organisation pointed out that central banks need to up their game in the financial landscape wit blockchain/crypto acting as the perfect tool. BIS also wants to remove the middle men from the process and establish a cheaper seamless network.
For the first time, the BIS has dedicated all of its time to a quarterly review to discuss Facebook’s Libra issuance. The organization based in Basel found out that central banks need to play their game in the financial environment as the ideal resource is blockchain/crypto. BIS also wants to take the middle men off the chain and set up a cheaper streamlined network.
The umbrella bank has not yet revealed what it plans to do with crypto regulations but that is probably a discussion for another day. Central banks have no hold over cryptocurrencies like Bitcoin and that is the reason why some countries were planning to release state-owned CBDC’s.
These Central Bank Digital Currencies [CBDC] are expected to possess the best of both worlds: regulatory overwatch as well as all the features of a cryptocurrency.