Crypto a 'flawed system': BIS

economictimes.indiatimes.com:

Bank for International Settlements (BIS) said Tuesday that decentralised cryptocurrencies are a «flawed system» and instead supported the development of a centralised alternative. The BIS, regarded as the central bank of central banks, backed «tokenisation» or the conversion of money and other assets into digital tokens that can be traded on programmable platforms, saying it offers the promise of a «major leap» in the financial system. Central banks and regulators have mostly been sceptical if not downright hostile to cryptocurrencies, which were developed using digital blockchains, a technology that allowed for decentralised management of trading assets. Proponents of the technology lauded its decentralised structure and often anonymous transactions that took control out of the hands of government institutions like central banks.

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But central banks have begun to test the waters of the technology, with the BIS taking a leading role. In an advance publication of its quarterly report, the BIS wholeheartedly embraced the underlying technology, but said its success in the financial sphere requires the trust imparted by it being backed by institutions like central banks. «Crypto and decentralised finance (DeFi) have offered a glimpse of tokenisation's promise, but crypto is a flawed system that cannot take on the mantle of the future of money,» said the BIS. The cryptocurrency system «lacks the anchor of