• The Bank for International Settlements (BIS) has released a report to the G20 that points out “inherent structural flaws” in crypto as the reason why it will never become money.
• The report admits that “some elements of genuine innovation” exist in crypto, including “programmability” of money.
• Despite recognizing these innovations, the BIS concluded that crypto is “unsuitable to play a significant role” as money in the world.
The Bank for International Settlements Rejects Crypto as Money
The Bank for International Settlements (BIS) has released a new report to the G20 titled “The crypto ecosystem: key elements and risks,” pointing to “inherent structural flaws” in cryptocurrency as the reason why it will never become money.
The BIS acknowledged crypto’s rise from a niche activity to something that impinges on mainstream finance, noting that millions of retail users and institutional investors have entered the crypto ecosystem in recent years.
The report also recognized some elements of genuine innovation existing within cryptocurrency, such as programmability of money which can automate sequences of financial transactions. However, despite this potential, they noted that so far it had failed to benefit society.
Unsuitable Role As Money
Overall, this means that cryptocurrencies are unsuitable to play a significant role as money in today’s world according to the BIS.