The Bank of International Settlements is a group that was founded in 1930 with representatives coming from countries like Sweden, United States, France, Switzerland, and the UK.
Basically, all of these economic powerhouses came together and said that cryptocurrencies are posing a threat to the financial system.
Surprise, surprise. Of course they’re posing a threat to the financial system.
Now, it’s really interesting and there are three main takeaways we can get from this:
In the article some of the statements made were that cryptocurrencies are speculative assets rather than money and in many cases, they are used to facilitate money laundering, ransom, and other financial crimes.
In actuality, a currency responsible for a lot of money laundering is the US dollar, so it’s fascinating the BIS can make a claim like this.Stablecoin’s paradox. Stablecoins attempt to import credibility by being backed by real currency. As such they’re only as good as the governance behind the promise of the backing.
Tech companies exploring crypto. The amount of data big tech companies have on their customers could be used to further entrench their power as they make inroads into financial services. Using data from their existing businesses in eCommerce, messaging, social media or search can give them a competitive edge.
So these are the three points the BIS has made and here is the proposed solution to their “created” problems. They encourage the growth of Central Bank Digital Currencies (CBDC), saying they offered the advantages of central bank money in a digital form. Other benefits they touted were integrity, liquidity, and settlement finality while maintaining the public’s trust in the monetary system.
Well, the public doesn’t have trust in the monetary system, which is why cryptocurrencies came about. Something interesting that the BIS missed however from their proposed solution is even if the central banks, came out and created their own digital currency they will still have to contend with crypto. Countries like China however are rolling out their CBDC at full speed, and they’re banning crypto so that they can grow their digital currency.
Coming back to the other BIS benefits of integrity, liquidity, and settlement finality, what they’re missing from this is the scarcity of money that central banks have proven over time they cannot maintain. They will just keep printing more money, which basically brings us to the same problem we have today, but in digital currency form.
It’s mind-boggling to see how so many of these institutions like central banks, are just now catching on to the threat that cryptocurrency poses to the monopolies that they’ve developed over the years. However it might be too late, and the proverbial train seems to already have left the station with cryptocurrencies being too big for them to stop.
Countries like China are doing their best to prevent it, but it could just be too late. Whereas if they had done this in the infancy of Bitcoin they probably could have shut it down, now it’s just too big and they might not be able to do it. The BIS is not only concerned about the growing popularity of cryptocurrencies but also about the potential DeFi crypto projects have to disrupt the current banking system.
So how does this relate to DeFiDrop?
DeFiDrop is a platform that helps investors make safe investments in DeFi crypto projects, which are created by anonymous teams. DeFiDrop audits each project on their launchpad and allows projects and investors to easily participate in the IDO process.
What DeFiDrop does is tackle a common issue with mainstream investing. Let’s say you’re an accredited investor and you want to invest in a new startup. The issue with that is the only way a consumer could invest in a new startup today is by being an accredited investor and you need a million-dollar net worth to become an accredited investor.
So if your buddy has a startup and you want to invest in his company, you can’t because you need to be an accredited investor. DeFiDrop allows everyday consumers to invest in new crypto projects, which have already been vetted. They’re real legit, crypto projects and you can start getting into these projects from the ground up. Only after you do your due diligence of course.
Originally published on https://defiboostx.medium.com/?p=1481e01cbcd1
Transcribed by Jacob Isenberg
Client: defiboost
defiboost.io
t.me/defiboost