In the article “The great crypto crisis is upon us” (Notice, December 17), Hyun Song Shin advocated the use of central bank digital currencies. I agree with this point of view, because it can effectively address the problem of trust.
In fact, FTX’s demise has shattered people’s faith in cryptos, reinforcing my long-held belief that the crypto market is extremely volatile, which can crash in a matter of days. There can be a big misconception that major financial institutions will do their due diligence appropriately. FTX was one example, where many large investment firms had invested in the exchange, including Sequoia, SoftBank, and BlackRock. It should not be assumed that the involvement of world-renowned investors is proof of robustness. On another front, cryptocurrency startups should place the utmost importance on timely disclosure, and regulators should require them to disclose proof of reserves and how assets are held.
To conclude, trust between stakeholders and the public is essential to further develop blockchain technology and cryptos. Approaches that can improve transparency and trust should be welcomed.
Grade 11 student, King George V School