Cryptocurrencies' model of generating trust limits its potential to replace conventional money, the Bank for International Settlements (BIS) writes in its Annual Economic Report.
In a special chapter on cryptocurrencies, the BIS — an international financial institution owned by central banks — has argued that the decentralized technology underpinning private digital tokens is no substitute for tried and trusted central banks.
A BIS announcement stated that, in contrast to conventional money, today's cryptocurrencies become “more cumbersome” to use as the number of users increases.
BIS on cryptocurrencies:
Read part two of a Port Technology blockchain technical paper by Wolfgang Lehmacher from the World Economic Forum
In a video (above), Hyun Song Shin, Economic Adviser and Head of Research, said: “Money has value because it has users.
“Without users, it would simply be a useless token.
“That's true whether it's a piece of paper with a face on it or a digital token.”
