Central Banks’ Board Members to Discuss Ways of Better Using Blockchain in CBDC Rollout
As part of the OMFIF Digital Monetary Institute debate on how blockchain and distributed ledger technology (DLT) benefit central banks’ plans of rolling out digital currencies, a virtual discussion will be held on August 19, bringing together board members and specialists of several central banks according to a notification on Aug 18.
Virtual Discussion on ways to better merge DLT and CBDC
Scheduled to speak are Simon Scorer — the Senior Fintech specialist from the Bank of England, Cees Van Wijk — the IT Team Manager from the ING Nederland, and Aniko Szombati — the Chief Digital Officer from the Magyar Nemzeti Bank.
Chiefly, the virtual discussion will explore ways of integrating blockchain-based solutions with existing systems, debate on DLT design choices, and the use of smart contracts for blockchain interoperability enabling smooth flow of money across borders.
Analysts project a future where central banks will increasingly embrace emerging technologies like DLT to implement monetary policies.
Through central bank digital currencies — which are minted not through public consensus but the express will of the bank of last resort, there will be efficiency and cost reduction in the management of the base money supply.
This will have a positive contagion effect ultimately contributing towards environmental conservation since digital emission of currencies isn’t as energy-intensive as physical minting of hard cash.
Notably, the added benefit of blockchain’s high resilience and transparency can be leveraged by central banks who are encouragingly receptive to new technology.
CBDC Gaining Prominence
In Dec 2019, Christine Lagarde — the president of the European Central Bank (ECB), confirmed that they will accelerate the work of a task force team. She also opined that the ECB should be “ahead of the curve.”
The team is considering the input of all EU members, defining the purpose of the CBDC, and mapping out technicalities.
Moreover, Lagarde also said the bank plans to play a role in cryptocurrencies but won’t interfere with private-led initiatives outside its sphere.
Ahead of the pack is China. Recently, BTCManager reported that the PBoC digital duan will be piloted in more cities. The announcement came only a few months after the conclusion of a successful closed-trial program with several state-backed commercial banks.