The tokenization of finance and the central banks' role in it are explored at the Bank of France event "Which role for central banks?" Jerome Powell, the head of the Federal Reserve, and Christine Lagarde, the president of the World Ba
severely criticises the cryptocurrency industry.
Powell claims that there are extremely serious structural transparency problems with DeFi when speaking at a gathering hosted by the Banque de France, the French central bank.
The tokenization of finance and the central banks' role in it are explored at the Bank of France event "Which role for central banks?" Jerome Powell, the head of the Federal Reserve, and Christine Lagarde, the president of the World Bank, both attended the event.
Powell, the chair of the Fed, has a stern message for the DeFi ecosystem. He thinks the weaknesses in DeFi have been revealed by the financial normalisation process, which has raised interest rates. During the epidemic, when the Federal Reserve implemented quantitative easing, the value of cryptocurrencies soared. However, the crypto market saw a significant selloff as a result of the Fed's restrictive monetary policy.
Powell emphasised the value of a central bank digital currency as well. In the age of cryptocurrencies, central banks will be able to maintain their role as an anchor thanks to CBDCs, according to Christine Lagarde, president of the European Central Bank.
A central bank digital currency is a highly divisive concept. Undressing Bitcoin author Layah Heilpern refers to it as an unethical kind of money. She thinks that since CBDCs are programmable currency, the central banks might abuse them.
The Federal Reserve is similarly divided about CBDCs. According to Neel Kashkari of the Minnesota Fed, there are no applications for CBDCs in the US. Kashkari thinks CBDCs can be utilised as instruments for widespread surveillance.
Jerome Powell's remarks have angered the crypto community. Powell stated that the primary source of trust for money will always be the central bank. The crypto ecosystem is not pleased with those comments because they are wholly at odds with Satoshi Nakamoto's mission.
