Agustín Carstens, head of the Bank for International Settlements (BIS), has expressed his doubt that cryptocurrencies have prevailed over fiat currencies issued by the world’s central banks. During his address at the Monetary Authority of Singapore on Wednesday, Carstens highlighted that stablecoIns are unreliable because they do not possess the “institutional arrangements and social conventions backing them.”

Agustín Carstens believes that cryptocurrencies have lost the ‘contest’ against fiat currencies

Agustín Carstens, general manager of the Bank For International Settlements (BIS), has stated that cryptocurrencies have lost the challenge against national currencies like the euro, pound, and yen. Carstens delivered a speech at the Monetary Authority Of Singapore and was also interviewed by Bloomberg News. The BIS CEO informed Bloomberg that the battle between fiat and crypto assets “has been decided.” Carstens asserted that technology alone doesn’t make “trustworthy money.” The BIS general manager added:

Only the legal and historical infrastructure behind central banks can give money great credibility.

‘Stablecoins cannot guarantee the uniqueness of money’

Carstens made similar remarks during his speech at the Monetary Authority of Singapore, using stablecoins as an example. He noted that there will always be “alternative visions of what a future financial system and digital money could look like,” adding that some cryptocurrency evangelists believe stablecoins will be the future Of money. The BIS CEO disagrees because he believes these supporters are forgetting what underpins fiat currencies.

“What this view forgets is that what underpins fiat money is not the application of novel technologies but all the institutional arrangements and social conventions behind it,” Carstens stated. “And it is precisely these arrangements and conventions that make money trustworthy to the public.”

Carstens noted that recent events have raised serious questions about whether stablecoins are capable of operating as money. He noted that stablecoins rely on the credibility and security of fiat currency, which means they cannot ensure money uniqueness. “[Stablecoins] do not accept central bank money or enjoy the support of the lender of last resort,” Carstens said. “Therefore, they cannot guarantee the uniqueness of the money.” Carstens believes that digital currencies could be an alternative to central financial institutions. “provide safe and stable money.”

Carstens concluded that it is essential for existing monetary authorities, particularly central banks, to contribute to such innovations. “If central banks don’t innovate, others will step in,” Carstens warned. “In the meantime, we must ensure that stablecoins do not harm investors and consumers, or contribute to a fragmentation of the monetary system that undermines the uniqueness of money.”

Do you agree with Agustín Carstens’ perspective that stablecoIns cannot guarantee the uniqueness of money and that central bank digital currencies are the way forward for safe and stable money? Share your thoughts with him in the comments section below.