BIS slams crypto - But they know very little about how the ecosystem works...

Many people have likened crypto to the internet and I see many reasons why I'd support that comparison, more on that later. Beforehand, let's take a quick glance at what the bank for international settlements has to say about crypto…

^{"The Annual Economic Report 2022 from the BIS, a global organization of 63 leading central banks, goes on to suggest that blockchain’s role in a future monetary system will likely take the form of central bank digital currencies (CBDCs), because “a system grounded in central bank money offers a sounder basis for innovation.”}

^{The report points to Terra’s historic collapse last month and the current bear market as the catalyst for what analysts have labeled the start of a “crypto winter,” but says that focusing on price action alone “diverts attention away from the deeper structural flaws” in crypto that render it unfit for purpose as a monetary system.decrypt}

There are two things to note here; "The Stablecoin Market" and "Developments". Frankly, the BIS is taking these two things as key points of argument. Noting that Terra's collapse depicts a shortcoming for crypto, citing that the need for a stablecoin market translates to the importance of central bank money, making crypto less of a threat to this system.

The belief here is based upon crypto pricing, as though stablecoins are designed to be pegged to the value of $1. It's however disheartening that the BIS knows very little about trade, value and how markets operate within this framework. Possibly, the BIS isn't aware that there are several stablecoins that are not pegged to the USD, rather, a network asset like HBD being pegged to hive.

Pricing doesn't translate to reliance, it's rather just a factor adopted to ease trade and value distribution. That said, BIS is highly wrong to believe pricing crypto stablecoins by the dollar makes it dependent, there are several other assets that can replace the dollar as a unit of account, it's only a matter of choice, demand fixes supply effect…

Secondly, the BIS claims that the ever growing number of cryptocurrencies is a flaw, you'll find out all the details if you read through the decrypt report. Again, this is totally wrong.

These numbers do not translate to flaws, rather, it translates to developments which creates competitions and this births dominance. The crypto ecosystem could be likened to any business field, even the internet. Just because Google is a search engine utilized by many, doesn't mean new companies can't market their products by tackling it's major flaw: "privacy"

This ever growing number is hugely beneficial. As time goes on, the crypto space will earn more investors and network participants, which will in turn solve the last piece of the puzzle, which is volatility… This happens to be just one other point of attack whereas the BIS claims crypto is illiquid, well, there are frankly many illiquid assets including stocks and bonds, however, the volatility of crypto markets are very temporary. Overtime, demand will close the gap on price volatility as it becomes increasingly difficult for a single party to pump or dump the markets as market/network participants grow…