This reflects the growing relevance of Islamic banking and is testimony to its acceptance as the embodiment of ethical banking and finance. Other threats to the financial system Financial institutions also face increasing challenges from other non-financial risks associated with the extensive use of technology and the potential outbreak of epidemics. Therefore it is vital then that the state of preparedness of BCP/BCM contingency measures is constantly ready to address any possibilities and not be blind sided by financial risks alone. Closing It is neither by accident nor coincidence that the Malaysian financial system is currently at a position of considerable strength, depth and resilience. Rather it is through the combined efforts of both industry players and the regulator as well as the support of all our  2  BIS Review 58/2009  stakeholders. I believe that this spirit of cooperation and mutual respect is entrenched and will serve us once again as we look forward to safely ride out the impact of the current global financial crisis. BIS Review 58/2009  3
But if the new currency offers superior user-friendliness without excessive exchange rate fluctuations, such disadvantages may not carry sufficient weight. In the near term, it is perhaps easier to envisage that new currencies may be attractive for certain types of transactions, for instance, cross-border payments. They could of course take market shares from existing payment solutions, but would not entail a fundamental transformation of the financial system. What about credit and saving in a world where the private sector has abandoned the Norwegian krone? If bank money is replaced by a cryptocurrency whose quantity increases through “mining” and remains constant in the long run, no credit institution will be able create money by extending loans. Some consider this a guarantee against instability and crises. Yet, without banks to assume liquidity risk, credit may become more expensive. In order to raise a long-term loan, someone will have to be found who is willing to tie up their savings for just as long. A possible solution is the emergence of new institutions that take on the risk by making long-term loans and raising short-term funding in cryptocurrency. But they will be left standing without the backing of a central bank that can relieve some of the risk and intervene in a crisis. Perhaps the attributes of today’s credit market can be imitated if a cryptocurrency functions as a means of settlement between credit institutions, as central bank reserves do today. In that case, the cryptocurrency will replace the central bank’s settlement system.