BIS Named CBDC Expert As The Head Of Innovation For The Euro Region

The BIS named CBDC expert Raphael Auer to be the new head of innovation center for the euro region as we are reading in our today’s crypto latest news.

Raphael Auer is now working as an economist in the Innovation and Digital Economy unit. However, the Bank for International Settlements- BIS named CBDC expert which Raphael is, as a new head of innovation center for the euro region. Auer is currently working as an economist in the Innovation and Digital Economy Unit of the bank based in Basel.

He will start his new role in February as the BIS innovation hub Eurosystem Centre is scheduled to open the first half and join other hubs in locations like Hong Kong, Switzerland, London, and more. The hub system was established in 2019 to foster collaboration among other central banks and companies in the financial technology sector. Auer has published a lot of papers on CBDCs, crypto, and stable coins.

As recently reported, The Bank for International Settlements-BIS concluded the decentralized finance space could play an important role in the traditional financial system but warned about the potential financial instability. According to the report, Defi risks and the decentralization illusion, DeFi could with regulatory improvements become a more integrated part of the broader financial system than it is today:

“History shows that the early development of novel technologies often comes with bubbles and loss of market integrity, even while generating innovations that could potentially be of broader use down the road.”

However, it added that if blockchains were to improve scalability and there’s large-scale tokenization of traditional assets and with suitable regulation is introduced to the market, DeFi could play a huge role in the financail system. BIS concluded that the Defi’s potential relevance it said that its growth poses financial stability concerns:

“Since collateral prices fall and margins rise at times of distress, downward price spirals often arise and may spread to the rest of the financial system.”

To better control the risks, the BIS suggested that the regulatory framework exists in the traditional finance if it is applied to the DeFi space and that tools are used to regulate and supervise the banks that could be expanded to cover stablecoin issuers. The report also focused on what is called the illusory decentralization in Defi because protocols have an inescapable need for centralized governance when it comes to making strategic decisions.