the Canada, Singapore and the United Kingdom are considering to work in the future with the Central Bank, Digital Currencies (CBDC). With digital Fiat money, Central banks want to work, especially in the cross-border payment traffic.
By Phillip Horch
16. November 2018 share Facebook Twitter LinkedIn xing mail
The future is digital – which has now been recognised by the government of the Federal Republic of Germany. In its strategy paper, they announced a Blockchain-Initiative including regulatory approaches for Bitcoin and other crypto currencies. But the phenomenon extends to the international level. So, Christine Lagarde, last week highlighted the benefits of crypto-currencies, but to not qualify without you. So you don’t trust the thing yet. The solution: The benefits of decentralized currencies and centralize. In the Form of a digital Central Bank money, the Central Bank of Digital Currencies.
The idea is doing the rounds
The idea of a digital Central Bank money is now, apparently, the round – including the United the Central banks of Canada, England and Singapore, have published a Paper, by discussing the idea and the supposed need for a digital General currency.
Basically, the Central banks distinguish in your Report between three different variants:
currency-specific model: limited to individual countries, banks offer Wallets, and digitize the particular Fiat currency. replaceable currency-specific model: expanded the above model; interchangeability on a transnational level. universal model: several Fiat currencies, the Bank will cover a digital Central cash. The latter model, the banks see as problematic. Therefore, it is said in the Report:
“Since [the latter] model needs to be underpinned by a basket of currencies, it is subject to the volatility and possible Manipulation, and investment activities. In addition, our analysis shows that the pace could be affected by the introduction due to the complexity of the addition of new currencies in the basket, the support for the [currency].“
A decentralized technology for a centralized System
For a implementation of the Central model, the publisher is considering to use the Distributed Ledger technology (DLT):
“We are considering to use the DLT as a possible technical implementation for CBDCs. In principle, there is no need for DLT (theoretical traditional centralized technologies may be sufficient). A DLT System could simplify CBDC-based payments, nevertheless by offering an advanced technology for the Transfer of Assets. The same applies for authentication, records, data management and risk management.“
