BASEL, Switzerland—Following the failure of several crypto platforms, the Bank of International Settlements (BIS) is exploring de-risking policies for central banks, with a ban on crypto activity one potential option.
BIS Economists Matteo Aquilina, Jon Frost and Andreas Schrimpf wrote in a bulletin that despite inefficiencies recently seen in the space, crypto proponents still believe decentralization and blockchains are solutions rather than problems, according to Blockworks.
“Recent developments underscore that the decentralization in crypto and DeFi markets is illusory,” they wrote, according to the Blockwork report. “The vision of crypto proponents is to do away with financial intermediaries, yet to function and achieve a meaningful scale, crypto markets rely heavily on centralized entities for several reasons.”
‘Crucial Element’
Blockworks noted the economists pitched potential options to tackle crypto risk.
“A crucial element to be considered when selecting which options to pursue is the ability to enforce any rule that is introduced, including ensuring that the resources needed to do so are on hand,” the bulletin states.