The Switzerland-based international financial institution, Bank for International Settlements, has published a report, according to which crypto assets are unsafe to rely on as a medium of exchange or store of value.
The bank also highlights cryptocurrencies do not reliably provide the standard functions of money.
"Crypto-assets have exhibited a high degree of volatility and are considered an immature asset class given the lack of standardization and constant evolution. They present a number of risks for banks, including liquidity risk; credit risk; market risk; operational risk; money laundering and terrorist financing risk; and legal and reputation risks," notes the report.
The bank also insists that before buying crypto-assets or providing related services, banks should do their due diligence, ensure clear & robust risk management framework and inform supervisors in a timely way.
Earlier, the Central Bank of South Korea said that the launch of a central bank digital currency (CBDC) may have "negative consequences on the South Korean financial system."
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