BIS Report Cites ‘Inherent Limitations’ of Cryptocurrencies; Questions Their Role in Global Economy
The
Bank of International Settlements (BIS) has published a report on cryptocurrencies and explains that the technology has serious
“flaws.” BIS researchers insist that permissionless blockchains have
“inherent limitations” that lead to network congestion and high fees.
The
BIS report details that the splintered landscape of the crypto sector sharply counters the unifying, ripple-like impact observed in conventional networks. The crypto industry, leaning heavily on decentralized validation methods, fosters a fragmentation that nullifies the function of money as a
synchronizing tool, thus rendering crypto an ill-fit for a monetary system, BIS researchers argue.
In a brisk span of
little more than a decade, crypto has vaulted from a peripheral interest to an influential player in the mainstream financial arena,
the report notes.
The banking organization
acknowledges that the capabilities of cryptocurrencies offer a level of automation in financial transaction sequences and facilitate their fluid integration. Paired with the concept of tokenization, these attributes could potentially minimize the requirement for manual oversight that presently hampers transaction speed and amplifies costs
, the BIS report submitted to the G20 finance ministers and central bank governors explains.
