The Bank for International Settlements is the central bankers’ central bank. Located in Basel, Switzerland, the BIS was begun to facilitate German war reparations payments after World War I and it has maintained its status as the linchpin of international finance ever since. This month the BIS issued an executive statement regarding digital currency and distributed ledger systems.
The paper in a nutshell: Current digital currencies are backed only by belief, but the potential for an established global digital currency is strong. Distributed ledger transactions and record-keeping are the most certain applications of digital currency technology. The number of non-bank entities in the space is concerning as it adds a level of unpredictability. Some non-bank players are motivated by money, others are motivated by ideology. There’s an informative chart on the banks’ perspective of digital currency on page 9.
I would sum the article’s tone as: digital currencies are disruptive enough to merit close attention by even the loftiest of players, but the players are planning for the disruption.