Bank for International Settlements (BIS)

Editorial Chief

Author

October 25, 2023

Published

The Bank for International Settlements (BIS) may not be a direct player in the world of cryptocurrencies, but it holds a significant role in the broader financial landscape that can impact the crypto market. For a crypto newbie, here’s a concise overview:

 

The BIS, often called the “central bank of central banks,” is an international financial institution headquartered in Basel, Switzerland. It was established in 1930 and serves as a bank for national central banks from around the world. Here’s why it matters to the crypto space:

 

  • Regulatory Influence: The BIS conducts research and provides recommendations on monetary and financial stability. Its reports and guidelines often influence regulatory decisions taken by individual countries. Since cryptocurrencies operate in a global, decentralized manner, regulatory decisions from influential bodies like the BIS can impact how cryptocurrencies are treated in different regions.

 

  • Warnings and Guidance: The BIS has issued various warnings and concerns about cryptocurrencies. They’ve highlighted potential risks, including price volatility, security, and regulatory challenges. Such warnings can impact public perception and may influence policymakers.

 

  • Innovation Hub: The BIS has established an Innovation Hub that explores emerging technologies, including blockchain and cryptocurrencies. While they may not directly endorse cryptocurrencies, their exploration of these technologies suggests their importance in the evolving financial landscape.

 

  • Central Bank Digital Currencies (CBDCs): The BIS has been actively involved in the development and study of central bank digital currencies (CBDCs). CBDCs are digital versions of a country’s fiat currency, and their potential implementation can impact how people use and interact with money, including cryptocurrencies.

 

  • Payment System Oversight: The BIS oversees international payment systems and settlement mechanisms. As cryptocurrencies gain prominence as alternative means of payment, the BIS’s work in this domain may indirectly affect crypto payment solutions and their adoption.