In the Wake of Turmoil, CBDCs and Cryptomarkets Will Take on a New Look, Says a Top BIS Official

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As last year’s tumult subsided, a new wave of central bank digital currencies (CBDCs) and cryptomarkets is expected to emerge in 2023. This prediction comes from the latest innovation head at the Bank for International Settlements (BIS).

The BIS, dubbed the central bank of the world, has been critical of cryptocurrencies for quite some time, as in the past, the BIS has compared the cryptocurrency bitcoin to both a Ponzi scheme as well as a bubble in the stock market. This scepticism has kept them from endorsing any digital currency projects in the past.

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At the start of 2023, there has been a rebound in the cryptocurrency market after a tumultuous 2020. One of the top digital currencies, Bitcoin, has seen its price rise to 40%, providing optimism that crypto markets are on their way back.

Cecilia Skingsley, the new head of the BIS’ Innovation Hub‘, said, “I would assume that the industry will learn from these failures, and they will come up with new things.”

With the rise of CBDCs and a resurgence in crypto markets, the banking industry is on the cusp of significant change. Already, 11 countries have launched their own Central Bank Digital Currencies (CBDCs), while over 100 more, representing more than 95 per cent of global GDP, are now exploring them. This year is set to be one of the most crucial milestones for CBDC development as it continues to gain acceptance globally.

Experts expect this wave of CBDC adoption to bring about a period of rapid innovation in the banking industry.

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On an international level, CBDCs could improve cooperation between different monetary systems by allowing governments to exchange funds without relying on private institutions or foreign reserves. This could promote economic integration between countries while enabling authorities to strengthen their oversight over monetary flows worldwide.

The future remains uncertain for crypto markets and CBDCs. However, one thing is sure, with so many countries now exploring them, it is only a matter of time before we start seeing significant developments in these areas over the coming years.

Overall, 2023 looks set to be a defining year for cryptocurrency markets and CBDCs alike – but geopolitical tensions may limit their full potential if global cooperation is not achieved soon.

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