The Bank of International Settlements (BIS) has warned that the financial services poised to be offered by big tech firms such as Facebook, Google and Amazon could generate new risks for the banking sector. The BIS — an international financial institution in Switzerland owned by 60 of the world’s central banks — published a report outlining its stance on June 23. Hot on the heels of Facebook’s newly-announced cryptocurrency, Libra, the BIS said that while big tech firms’ foray into finance can bring efficiency gains and broaden financial inclusion, regulators must step up their action to mitigate the new and …

Bitcoin (BTC) critic and general manager at the Bank for International Settlements (BIS) Agustin Carstens advised against the issuance of central bank digital currencies (CBDCs) in a speech in Dublin on March 22. Bloomberg reported on the speech the same day. Per the report, Carstens explained that a CBDC could facilitate a bank run, enabling people to move their funds from commercial banks to central bank accounts faster, thus destabilizing the system. Another issue that Carstens said arises with CBDC use, according to Bloomberg, is the different impact of interest rates on the public's demand for money. Carstens reportedly said …

International banking authority the Basel Committee on Banking Supervision (BCBS) has issued a warning statement on crypto assets on March 13. The BCBS is a committee of banking supervisory authorities hosted and supported by the Switzerland-based Bank for International Settlements (BIS) — an organization made up of 60 of the world’s central banks In today’s statement, the committee warned that the robust growth of the crypto industry could potentially “raise financial stability concerns and increase risks faced by banks.” The committee noted the risks were present despite the crypto market’s currently small scale in relation to the scope of the …

A recent report from the Bank of International Settlements (BIS) has cast a spotlight on the efficacy and longevity of the proof-of-work (PoW) consensus and the future of Bitcoin. The paper takes an in-depth look at how the Bitcoin protocol verifies payments using blockchain technology and various consensus algorithms. PoW algorithms are a major point of discussion, with the author suggesting two major drawbacks. Firstly, the high cost of ensuring payment finality in a reasonable time frame, and the belief that PoW systems won’t produce adequate transaction fees to guarantee payment security in the long run. It is a controversial …

Bitcoin’s (BTC) problems are only solvable by departing from a proof-of-work (PoW) system, according to research published by the Bank for International Settlement (BIS) on Jan. 21. According to the paper, when in the future Bitcoin’s block rewards fall to zero — given that only a limited number of new Bitcoin will ever be created — transaction fees alone will not be able to sustain mining expenses. The argument implies that the Bitcoin network would become so slow that it would be virtually unusable, stating: “Simple calculations suggest that once block rewards are zero, it could take months before a …

A new report published on Jan. 8 by the Bank for International Settlements (BIS) has found that seventy percent of central banks worldwide are conducting research into central bank digital currency (CBDC) issuance. However, concrete plans for implementation and motivations vary considerably across contexts. The BIS is an organization based in Switzerland made up of 60 of the world’s central banks, and has to date devoted a number of major reports to both decentralized cryptocurrencies and CBDCs. The latter are distinct from the former in that they are digital currencies issued by a central bank, whose legal tender status depends …

Executive Board member of the European Central Bank (ECB) Benoit Coeure considers Bitcoin (BTC) to be the “evil spawn of the [2008] financial crisis,” Bloomberg reports Nov. 15. Coeure reportedly made his acid remarks at the Bank for International Settlements (BIS) in Basel. The BIS’ general manager Augustín Carstens has likewise previously made a spate of crypto-skeptical remarks, notably characterizing Bitcoin as a “combination of a bubble, a Ponzi scheme and an environmental disaster.” Explicitly recalling Carstens’ characterization, Coeure framed his criticisms of the ten year old innovation with a reference to the aftermath of the Lehman Brothers bankruptcy in …

A new report published by the Bank for International Settlements (BIS) has found a strong correlation between crypto prices and news of regulators’ interventions. According to the report published September 23 by BIS – an organization based in Switzerland made up of 60 of the world’s central banks – cryptocurrencies retain close links to news of regulatory actions across different national jurisdictions. This is despite crypto’s design to function in a borderless and frictionless manner. BIS’ empirical investigation spanned all news events from the start of 2015 to the end of June 2018, making a criterion of the fact that …