Central banks around the world are taking into account the development of their own cryptocurrency and could have it ready for consumer use within five years, based on a new report commissioned by Armonk-based IBM. The research conducted by IBM in conjunction with Official Monetary and Financial Institutions Forum (OMFIF) showed that policymakers from various major central banks are seriously considering developing a Central Bank Digital Currency (CBDC).
The IBM-OMFIF research involved a survey of 23 central banks from both advanced and emerging economies. The findings indicated that 73 per cent of central banks favour the implementation of CBDC to address retail issues where fiat money can be easily used. The research showed that central banks see consumer-ready CBDCs as a viable alternative for fiat currency.
The findings also showed that at least half of the respondents were wary that private projects such as Libra might pose a threat to monetary sovereignty. With no proper regulations, private digital currencies have the power to undermine central banks’ monetary sovereignty as well as becoming a threat to financial stability. Central banks increasingly acknowledge that they are understanding and working closely with the developers of the private digital currencies so they may boost their fiscal regulatory role.
Gauging on the analysis of the findings, the researchers thus concluded that the maiden CBDC will possibly be functional in a span of five years and will be an alternative to that country’s fiat currency. Interestingly, the report said that this will not come from major economies.
The study has drawn a conclusion that “central banks are responding to the reality that digital currencies, either privately or publicly issued, will soon be part of the global monetary system, and that it is in their interest to ensure they are neither left behind nor displaced”.
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A keen researcher who believes in enriching her knowledge. For Shuhada, the crypto world intrigues her sense and offers plenty of high delicious 'crypto cuisines'.