Digital & Technology

Cryptocurrencies: looking beyond the hype

BIS report on cryptocurrencies argues that beyond the hype, it is hard to identify a specific economic problem which they currently solve.

In a BIS Annual Economic Report, it is noted that Cryptocurrencies promise to replace trusted institutions with distributed ledger technology. Yet, looking beyond the hype, it is hard to identify a specific economic problem which they currently solve. Transactions are slow and costly, prone to congestion, and cannot scale with demand.

Cryptocurrencies' model of generating trust limits their potential to replace conventional money, the Bank for International Settlements (BIS) writes in its Annual Economic Report (AER), a new title launched this year.

BIS argues that the decentralised technology underpinning private digital tokens is no substitute for tried and trusted central banks. Today's cryptocurrencies become more cumbersome to use as the number of users increases, in contrast to conventional money, which works better the more people use it and trust it.

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