The year 2019 has been eventful so far. We’ve witnessed a lot, and one gets the feeling there’s more to come. From the announcement of Facebook’s Libra stablecoin to the reactions that have followed from multiple financial institutions and allegations that cryptocurrency exchanges are reporting fake trading volumes, it has become obvious that anyone who has been “sleeping” on the industry over the past few years has awoken.
However, another beautiful effect of the rally is how it has made some of the most ardent crypto bashers to become sudden believers.
The latest in the line of basher-turned-believers is Augustine Carstens, the Managing Director of the Bank for International Settlements (BIS). According to a report by the Financial Times, Carstens seemed to have gotten a change of heart concerning crypto assets this week, saying that he and his agency are working on the prospect of issuing a bank-backed digital currency.
In addition to that, the report claimed that he added a note of support for individual Central Banks that are currently working on the same thing.
A famed hater finally sees the light
Over the course of his career, Carstens is one of the people who have gotten a name for being particularly critical of cryptocurrencies and digital assets in general. He’s urged people not to buy cryptocurrency, and he has also described Bitcoin with words such as “bubble,” “a Ponzi scheme,” and “a threat to the environment.”
Back in March, the Mexican economist made headlines for scoffing at the very idea of Central Banks around the world issuing their own digital assets. Speaking at the Central Bank of Ireland, Carstens reportedly said that the issuance of Central Bank-backed digital currencies could result in some grave consequences for the stability of the global financial system.
He added, “Central Banks do not put a brake on innovations just for the sake of it. But neither should they speed ahead disregarding all traffic conditions.”
However, given how things seem to have turned out since then, it would seem that even he has been able to have a change of heart. The sudden support for digital currencies isn’t particularly surprising, given how many people within the financial industry tend to switch sides once they see an opportunity.
The market could get really crowded
As for the prospect of launching a bank-backed digital currency, the BIS is also joining a seemingly crowded pool. Just last week, the International Monetary Fund (IMF) published the report of a joint research effort with the World Bank, confirming that a lot of Central Banks are eyeing a move into crypto.
While timelines are yet to be given, a lot of countries have found reasons to move in now due to FOMO. As the IMF reports, developing countries could use digital assets as a means of circumventing the rising banking costs, while developed countries could harness the ability of these assets to serve as an alternative to cash and fiat currencies.