BIS representative: bitcoin failed as a means of payment

Bitcoin has failed as a currency due to high volatility, Benoit Kere, head of the Bank for International Settlements (BIS) innovation hub, said in an interview with Bloomberg.

The financier acknowledged that the cryptocurrency has “taken its place”, but there is a need for a central bank digital currency (CBDC) that will be used for payments.

Bitcoin may be an “investment vehicle,” but it does not undertake to define a role for an asset, Kere added.

According to him, there is no race with the release of CBDCs, since they will fulfill different roles in different countries:

“I wouldn’t say that. All countries are different. If you look at the China project, it is very internal. It really suits their financial system and the way they work and want to regulate it … Each state will go its own way. In that sense, I don’t think there is a first mover advantage. ”  

Digital currencies issued by large tech companies are more likely to compete for CBDC, so it is necessary to work out common rules, says Kere.

“We need to create a map so that everyone can go on their own journey,” he said.

Recall that Facebook has confirmed its intention to launch the digital currency Diem (formerly Libra) in 2021. At the same time, Microsoft President Brad Smith believes that companies should not issue currencies, but leave this mission to the state.

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