Home CryptocurrencyBitcoin BIS chief describes ideal ‘single ledger’ for central banks and other financial users

BIS chief describes ideal ‘single ledger’ for central banks and other financial users

by SuperiorInvest

Speaking at the Singapore FinTech Festival on February 22, Bank for International Settlements CEO Agustín Carstens described the digital financial infrastructure he believes would best suit the needs of central bankers. He called this infrastructure a “single ledger”.

Carstens compared a theoretical unified ledger with a smartphone, saying the two work seamlessly with a number of components. However, unlike a smartphone, a unified ledger would have an open architecture and exhibit the programmability and composability of running and pooling smart contracts. Smartphone users have more than 2 million apps at their disposal, Carstens noted. He said:

“The single ledger is a digital infrastructure with the potential to combine the monetary system with other registries of real and financial claims.”

The unified ledger would not need to be decentralized or permissionless, Carstens said, but could accommodate a variety of projects that “use money as a means of payment and settlement,” where the central bank plays a large role in managing the ledger and the consumer-facing sector is in private hands.

The central bank’s digital currency and tokenized deposits could exist in “distributed” parts of the ledger, with smart contracts facilitating their interaction, Carstens said. The book could be used for everything from micropayments in the Internet of Things to escrow in real estate transactions.

Related: BIS to launch stablecoin monitoring project and focus on CBDC experiments

Carstens took the opportunity to express his current thinking on the stablecoin. He said of stablecoin proponents:

“But this view forgets that what sustains fiat money is not the application of new technologies, but all the institutional arrangements and social conventions behind it.”

They also run the risk of being depegged, he added. Stablecoins were developed because they were technically able to do things that other forms of money could not. Central banks should take over these roles from them.

Carstens too sent shockwaves through the crypto community February 22 with a blunt assessment of the cryptocurrency’s success.

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