Benoit Coeure calls on central banks to ‘act now’ on crypto and DeFi

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Benoit Coeure, head of the innovation hub at the Bank for International Settlements (BIS), called on central banks around the world to act quickly in the face of the growing space of crypto and decentralized finance (DeFi).

In a speech to the Eurofi Financial Forum on Friday, Coeure said stablecoins and DeFi platforms will “challenge” banking models and central banks “should act as long as the current system is still in place and act now.” .

Central banks must step up their efforts to develop official digital currencies or CBDCs and retain their ability to provide price stability and financial stability, according to Coeure.

“The time has passed for central banks to get started. We need to roll up our sleeves and speed up our work on the details of the design of CBDCs,” he said. “CBDCs will take years to deploy, while stablecoins and crypto-assets are already there. It makes getting started even more urgent.”

Coeure, who is currently leading CBDC research for the BIS, further said central banks need to start preparing answers to critical questions such as how public and private money should coexist in new ecosystems. For example, should CBDCs be used in DeFi rather than private stablecoins? “We urgently need to ask these kinds of questions about the future,” he said.

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