Bitcoin (EXANTE: Bitcoin) has failed the test of being a currency, said the head of the Bank of International Settlement Innovation Hub Benoit Coeure in an interview with Bloomberg. Coeure emphasized the cryptocurrency cannot work as a payment instrument due to the high volatility.
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"Bitcoin can be an investment instrument and it is not for me to judge on that or to advise on that," Coeure added.
Coeure added central banks are looking for an instrument that would provide liquidity, safety, and that "can be used as a commodity in the global payments system." This is why financial regulators are studying central bank digital currencies (CBDC).
In January this year, the Bank for International Settlements estimated that central banks around the world would likely issue their own CBDCs in the next three years.
The financial institution said over 85% of central banks participated in its survey admitted they had been exploring the benefits and drawbacks of CBDCs. Agustín Carstens, General Manager at Bank for International Settlements, said CBDCs would be an additional payment option that "coexists with private sector electronic payment systems and cash."
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