I am particularly concerned that a centralbank-issued digital currency that’s held widely around the globe could be the subject of serious cyberattacks and could be widely used in money laundering and terrorist financing. The effect of all this would significantly divert our focus from work to improve or establish new private-sector retail payment systems based on existing institutions.
As I have stated earlier, Basel II strengthens the link between regulatory capital and risk management as it will help us ensure that banks will maintain capital appropriate to their risk-taking activities. Banks are also expected to properly assess and manage the risks. Moreover, banks would be required to disclose pertinent information necessary to enable market mechanisms to complement the BSP’s supervisory oversight function.