Benoit Coeure, head of innovation hub at the Bank for International Settlements (BIS), has called on central banks around the world to act fast over the rising crypto and decentralized finance (DeFi) space.
In a speech delivered at the Eurofi Financial Forum on Friday, Coeure said stablecoins and DeFi platforms will "challenge" bank models, and central banks "have to act while the current system is still in place — and to act now."
Central banks must step up their efforts to develop official digital currencies or CBDCs and retain their ability to deliver price stability and financial stability, according to Coeure.
"The time has passed for central banks to get going. We should roll up our sleeves and accelerate our work on the nitty-gritty of CBDC design," he said. "CBDCs will take years to be rolled out, while stablecoins and cryptoassets are already here. This makes it even more urgent to start."
Coeure, who is currently leading research on CBDCs for the BIS, further said that central banks need to start preparing answers to essential 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 ourselves these kinds of questions about the future," he said.