A fresh report from the Basel Committee on Banking Supervision, a consortium of international supervisory banking authorities, warns of cryptocurrencies. Specifically, the organization is alerting that the growth of cryptocurrencies could present a number of risks for traditional banks.BCBS warns continued growth of cryptocurrencies could be risky for banks
The Basel Committee on Banking Supervision (BCBS) is a division of the Bank of International Settlements (BIS), which is oftentimes referred to as the ”central bank of central banks.”
As such, it is quite plain that central bank-issued fiat currencies are more appealing to the BCBS than cryptocurrencies. Subsequently, it should come as no surprise that the BCBS has now released a statement warning that more growth in crypto-assets could adversely impact traditional banks.”[…] the Committee is of the view that the continued growth of crypto-asset trading platforms and new financial products related to crypto-assets has the potential to raise financial stability concerns and increase risks faced by banks.”
Put simply, the statement contains an exhaustive critique of cryptocurrencies, arguing that the asset class cannot ”reliably provide the standard functions of money and are unsafe to rely on as a medium of exchange or store of value.”
Nevertheless, the statement argues that cryptocurrencies are a prime concern for banks – despite banks supposedly having ”very limited exposures” to the assets class. Moreover, the statement argues that cryptocurrencies pose a vast myriad of risks for banks.
Namely, these include ”liquidity risk; credit risk; market risk; operational risk (including fraud and cyber risks); money laundering and terrorist financing risks; and legal and reputation risks.”The BIS has previously issued harsh criticisms of cryptocurrencies
However, this is just the latest in a series of negative cryptocurrency-related statements fr...