Thomas Moser, the deputy head of the Swiss National Bank, spoke with Cointelegraph editor Aaron Wood about the latest developments in central bank digital currencies (CBDCs), stablecoins, and regulations at the European Blockchain Convention 2022, which just ended.
Moser talked about how private stablecoins are changing and how people are accepting them. He also talked about how central banks want to launch CBDCs and said that both things could happen at the same time. He said that CBDCs would have very simple functions, and that private stablecoin issuers could build services on top of them to meet the needs of regular users.
Moser said that the recent collapse of Terra’s TerraUSD (UST) and how that affected rules could have long-term effects on regulators.
He went on to say that governments could be forced to prefer centralized stablecoins over decentralized ones, but not every decentralized stablecoin is like UST. He said:
“I’m worried that people will think that all decentralized stable currencies are the same, which is not true, so there is a risk.” I think that regulation will work in favor of centralized stablecoins.”
When asked about changes to regulations, Moser said it could take a while. He talked about restrictions on the internet from the 1990s, when the government took the time to make new rules instead of using phone standards.
Moser says that the decentralized finance (DeFi) ecosystem would end if banks kept their current restrictions on the crypto business. He said more:
“If you just take the existing regulation and put it on crypto, then DeFi will disappear because you will only have centralized entities that you can regulate with the current regulation. For DeFi, where there is no single entity to be held accountable for, which is really just smart contracts interacting, you need a different type of regulation.”
Switzerland’s central bank is one of the few countries that has started testing CBDCs at the national level. In January, wholesale CBDC testing began in Switzerland. Later that month, the Swiss National Bank released a report based on its tests that said the risks were worse than the benefits.
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