In line with a recent report published by ‘Reuters’, Germany’s central bank’s president, the Deutsche Bundesbank [BBk], has warned central banks regarding the potential risks of introducing digital assets.
Jens Weidmann, BBk president and chairman of the board of the BIS [Bank for International Settlements], reportedly claimed that the adoption of digital assets might probably destabilize the financial economy during period of crisis.
The German economic expert explained that easy access to digital assets might accelerate a collapse of lenders, whereas it’d “fundamentally amend the business model of banks” even in a good economic ecosystem.
Weidmann additionally argued that access to digital assets might probably increase volatility, that could negatively have an effect on central banks in terms of balance sheets.
The Deutsche Bundesbank is a ‘part‘ of the European System of Central Banks, and is reportedly the foremost influential entrant of the organization due to its former size. The bank is supposedly the primary central bank to amass full independence, leading to the name Bundesbank model for its form of a central bank.
The Bundesbank model is reportedly employed by ECB [European Central Bank] as a basis for the complete Euro system.
Just yesterday, the German government ‘claimed‘ that the authority has not seen any “cyber incidents” or market manipulation occurring on cryptocurrency trading platforms within the country.
Also earlier this week, an official at the ECB ‘stated‘ major benefits of CBDCs [central bank digital currencies], while also additionally stressing caution. In line with the official, ‘CBDCs‘ will play the role of a medium of exchange, a method of payment and a store of value . While adding further, the ECB official said that the adoption of such assets might additionally probably increase levels of economic exclusion.