In her first interview since recently taking over as Head of the BIS Innovation Center, Cecilia Skingsley stated that due to the turbulence of the cryptocurrency market, the collapse of the FTX exchange, and the bankruptcy of several crypto lenders, the digital asset market lost more than $ 2 trillion.. However, since the beginning of 2023, the market began to recover, and despite the negative events listed above, cryptocurrencies were never destroyed.. According to Skingsley, the industry will learn from failure by coming up with something new.
The former top manager of the Central Bank of Sweden also noted that central banks have not changed their plans to issue their own digital currencies either.. BIS coordinates international experiments with government stablecoins, which are created both for public use and for interbank settlements.
Cecilia Skingsley noted that already more than 100 countries, which account for more than 95% of global GDP, are exploring the possibilities of launching a CBDC. Many countries have already launched their own digital currencies. In the fall of 2020, the Central Bank of the Bahamas launched the Sand Dollar into circulation, in 2021 the Nigerian central bank officially launched the digital naira, and the People's Bank of China (PBOC) recently expanded testing of the digital yuan to 17 provinces.
The mass adoption of state digital currencies is due to the fact that people are using less cash, and the authorities are trying to reduce the interest of users in private cryptocurrencies, Skingsley argues.. Another driving force behind the accelerated development of the CBDC has been US sanctions against Russia, Venezuela and other countries.. Therefore, states under sanctions are interested in launching digital currencies of central banks in order to reduce economic pressure and find a safe alternative to the usual payment systems.
“Which countries can be our allies in testing and introducing digital currencies of the Central Bank for international payments? Probably, “tectonic plates” will be formed depending on the geopolitical orientation of states. There is too much friction in the world, not all countries will be ready to fully cooperate with other countries – this is the reality. It turns out that government stablecoins will never be fully interconnected.. Although BIS strives for them to be as versatile as possible,” the BIS top manager assured.
Recently, Bits.media published an article about government digital currencies, which talks about how much CBDCs can change global finance and become serious competitors for cryptocurrencies.