But in your opinion, why this decision?
Because allowing to do a thing doesn't mean they will, and allowing crypto doesn't mean they will go for some meme coin.
This is the thing, tier 1 reserves must always meet a % of the bank reserve and bank deposit, if they go under then the bank must balance its account to cover it, by either restricting lending, moving other things from other tiers to T1 or etc etc.
No bank will play monopoly with crypto and going for the 2% as a dump can trigger a force sell of other assets , so what they will choose and BIS knows this better than anyone is stable coins, which means filling their T1 with basically $, and instead of having to balance this with fluctuating crypto they will use this a a balance since it's usd nominated.
BIS tells banks about risks and losses, but other economists say that banks have long been bankrupt, and their balance sheets contain assets that are worth nothing, so every year governments pour huge liquidity into these banks to avoid financial collapse.
How long have you heard about banks falling and crashing and the banking sector dead?
You have a wrong view on those assets, which are much like Bitcoin, so here is an example:
- you buy $10k worth of Bitcoin, where are those $10k? They are not in Bitcoin, they are in the pocket of the guy that sold you the coins. For your coins to be worth $10k you don't use the receipt, you need another guy to buy them at $10k and so the circle goes.
- bank assets are nothing different, their assets go up and down in value, the only thing that triggers a collapse is when the collateral on the loans is going down and there is no money to be taken from the loaner to prop it up.
When does this happen? Well, when there is no more money invested in the said assets, which brings us up to Bitcoin, what will happen when the guys that were supposed to buy your 10k coins with 20k are no more and there is only a guy with a 100 bill?
If all the assets a bank holds go down they will go down because the people won't pay a dime for it or don't have a dime to pay for it , which means that before the banks fall we're royally screwed already!
Think of it as Walmart going out of business because they don't have food to sell, don't you think there is a bigger problem already than your stock crashing?
