To Innovation - Breaking Politics, Economics, Crypto & IT News

learn more
Reporting from Watford, UK and LA, US since 1996
learn more

YouTubers try to be TikTokers

Shorter videos are a trend to hate or follow

Most central bank of the world have cryptocurrencies planed

Central banks investigate the risks outside the financial system, while the CBDC wants to strengthen the existing system

26.Jan.20 9:10 AM
By Shawn Highstraw


Most central bank of the world have cryptocurrencies planed
The Bank of International Settlements (BIS) from Basel has issued a new research report this week. The researchers' conclusion: 80% of all central banks conduct "serious research" into the arrival of their own crypto currency.

The BIS can be described as a "central bank of central banks". Central question: what about the development of "central bank digital currencies" (CBDCs), translated as digital bank currency.

They are actually investigating a digital variant of uncovered fiat money. But transactions on a blockchain are usually also cryptographically encrypted.

That is why there is a "crypto currency", the value of which is linked to the local currency such as the euro, Pound or Swedish krona.

By means of blockchain technology, it is hoped that transactions will be faster and cheaper than existing systems. However, the scale is still limited: the banking projects are still in a draft and pilot phase.

In the second half of 2019, BIS interviewed 66 central banks from both the western world and emerging economies, reports The Block Crypto.

The researchers state, among other things:

"Central banks are conducting serious research into the development of CBDCs. Some central banks have already developed an operational framework that is beyond the concept phase. There is also a group that argues in favor of increasing its mandate through the law. Due to external developments (read: Libra), this development has gained momentum. "

Some figures from the report:

80% of the respondents research and / or want to develop a CBDC
40% of the central banks are already in a phase of proof-of-concept or experiment
10% have already developed a pilot. These are central banks in emerging economies

As a rule, regulation follows technological and other developments and that is no different when developing a digital bank currency. A central bank needs a (larger) mandate to issue a CBDC.

25% of the respondents say they have argued in favor of increasing that mandate through the law
33% still have no mandate to issue a CBDC
40% think it is "uncertain" to receive this mandate

In some countries, the mandate of a central bank extends so far that a CBDC will fall "automatically" under its legal responsibility.

Advisory body BIS supported the arrival of CBDCs through director Agustín Carstens. With this survey, Carstens wants "proof" that there is also a need among central banks for this.

The international organization World Economic Forum (WEF) has also developed a toolkit for CBDCs. The framework was named "CBDC Policy-Maker Toolkit" and contains a number of guidelines for central banks to determine whether a CBDC is the right way.

In its report, BIS distinguishes between CBDCs, stablecoins and crypto currencies issued by "third parties". In their experience, bitcoin and other crypto currencies "fall outside their own system". Also behind stablecoin such as Tether USDT and possibly Libra from Facebook are companies as a publisher.

The researchers conclude:

"For crypto currency, the results are compared with the 2018 study. For local or cross-border payments, there is no future for crypto currency. The usefulness of crypto currency is zero or limited to a niche.

Central banks seem more positive in the area of ​​stablecoins. 60% of the central banks surveyed determine "the monetary impact and financial stability of stablecoins".

The researchers crack the usefulness of crypto currency in its conclusion:

"Stablecoins may lead to adoption, while crypto currencies have failed so far. Central banks investigate the risks outside the financial system, while the CBDC wants to strengthen the existing system. "

Back to the list

Related Information: