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Lionel Laurent and Marcus Ashworth

Central Banks Face a Moment of Truth on Crypto

Europe and the U.S. might have to pick up the pace if emerging-market digital-currency projects start to bear fruit.

Moment of truth.

Moment of truth.

Photographer: Chris McGrath/Getty Images Europe

The head of the Bank for International Settlements, Agustin Carstens, recently set out a dark vision for our financial future, quoting Goethe’s “Faust” and claiming that the “soul” of money was at stake.

He warned that the proliferation of unregulated cryptocurrencies and the spread of Big Tech firms into payments risked damaging consumer trust and splitting the monetary system. To build a safer alternative, he said, central banks should issue digital cash, which would serve as a bedrock for private-sector payments technology while also curbing the industry’s rent-seeking excesses.