Business 9 January 2019

Paul How

70% of central banks exploring digital currency

The Bank of International Settlements has found that a large number of central banks are exploring the issuance of a digital currency.

However, chances for many of these countries to issue their central bank digital currency (CBDC) in the next few years remain slim.

For its report, ‘Proceeding with caution—A survey on central bank digital currency,’ authors Christian Barontini and Henry Holden used data polled from 63 central banks, whose countries are said to represent 80% of the world’s population and 90% of global economic output. 41 of the central banks were from those of emerging market economies (EMEs), and 22 from advanced economies.

When asked in late 2018, 70% of the central banks stated they were working on their CBDCs. “Central banks currently not looking at CBDC are typically from smaller jurisdictions and/or face more pressing priorities,” the authors said.

56% of the central banks said that they were exploring CBDCs for wholesale use, or use that is restricted to specific agencies for interbank payments and the like, as well as use by the general public. 13% were focused on wholesale use, while 31% on general-purpose CBDCs.

The paper also mentioned an increasing number of collaborations between various central banks in relation to distributed ledger technology, such as Project Stella between the European Central Bank and the Bank of Japan, and a joint project of the Bank of Canada, Monetary Authority of Singapore, and the Bank of England.

When asked their purposes for studying CBDCs, most respondents indicated “payments safety and domestic efficiency” as of primary importance. Least important for central banks was “financial inclusion” in the case of wholesale CBDCs, and, “less predictably, cross-border payments efficiency” in the case of general-purpose CBDCs.

The authors noted however that the choices given to the central banks in the survey “remain in a rather narrow range which suggest at this ‘investigative’ stage the main motivation is to learn.”

Domestic payments efficiency and financial inclusion were most important to EMEs, while advanced economies valued payments safety and financial stability most.

Over 85% of respondents said they weren’t likely to issue any type of CBDC in the next three years. For the medium term, or within six years, only a small percentage said they were “very likely” to issue their CBDCs, with about 40% indicating the issuance of either wholesale or general-purpose CBDCs was still “very unlikely.”

Almost 25% of the central banks indicated receiving authority for the issuance of the CBDCs, with a third saying they didn’t have such authority, and 40% unsure. “The high level of uncertainty is unsurprising, given that most central bank mandates predate not only cryptocurrencies but also many forms of electronic money,” the report read.

The BIS is an organization based in Switzerland, and is owned by 60 central banks.

Note: Tokens on the Bitcoin Core (SegWit) chain are referenced as BTC coins; tokens on the Bitcoin Cash ABC chain are referenced as BCH, BCH-ABC or BAB coins.

Bitcoin Satoshi Vision (BSV) is today the only Bitcoin project that follows the original Satoshi Nakamoto whitepaper, and that follows the original Satoshi protocol and design. BSV is the only public blockchain that maintains the original vision for Bitcoin and will massively scale to become the world’s new money and enterprise blockchain.

COMMENT

latest news

‘Irresponsible tweets’ land John McAfee in hot water with Skycoin

Business 22 March 2019

‘Irresponsible tweets’ land John McAfee in hot water with Skycoin

Skycoin has responded on Twitter that it John McAfee’s comments about “whale f--king” that actually led to the project being forced to sever ties with the cryptocurrency influencer.

Read More
Watch out: Fake Wasabi crypto wallet out to steal your crypto

Business 22 March 2019

Watch out: Fake Wasabi crypto wallet out to steal your crypto

The scam wallet is an uncanny clone of the real Wasabi wallet. It comes with a fake website and for those who are not keen, it's almost impossible to distinguish between it and the real one.

Read More
UPS partners with blockchain startup for B2B platform

Business 22 March 2019

UPS partners with blockchain startup for B2B platform

UPS, a global leader in logistics, announced a partnership with Inxeption that targets B2B merchants.

Read More