Letter: Central banks can help restore trust in crypto

In the article “The great crypto crisis is upon us” (Opinion, December 17), Hyun Song Shin advocated using central bank digital currencies. I agree with this view, as it can effectively address the concern about trust.

As a matter of fact, the demise of FTX shattered people’s confidence in cryptos, reinforcing my long-held belief that the crypto market is extremely volatile, which may collapse in a span of a few days. There may be a big misconception that leading financial institutions will do their due diligence in a proper manner. FTX was a case in point, where many major investment firms had invested in the exchange, including Sequoia, SoftBank and BlackRock. We should not assume that such world-renowned investors’ involvement is proof of robustness. On another front, cryptocurrency start-ups should pay utmost importance to timely disclosure, and regulators should require them to disclose proof of reserves and how assets are held.

To conclude, trust among stakeholders and the public is instrumental in further developing blockchain technology and cryptos. Approaches that can enhance transparency and confidence should be welcomed.

Gordon Ng
Year 11 student, King George V school
Hong Kong

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