Bitcoin
Bitcoin (BTC)
$70,715.00 2.72225
Bitcoin price
Ethereum
Ethereum (ETH)
$3,561.25 1.58493
Ethereum price
BNB
BNB (BNB)
$581.25 2.13761
BNB price
Solana
Solana (SOL)
$187.95 1.80912
Solana price
XRP
XRP (XRP)
$0.6277400 2.43081
XRP price
Shiba Inu
Shiba Inu (SHIB)
$0.0000321 6.4303
Shiba Inu price
Pepe
Pepe (PEPE)
$0.0000081 5.81543
Pepe price
Bonk
Bonk (BONK)
$0.0000282 10.65997
Bonk price
Bitcoin
Bitcoin (BTC)
$70,715.00 2.72225
Bitcoin price
Ethereum
Ethereum (ETH)
$3,561.25 1.58493
Ethereum price
BNB
BNB (BNB)
$581.25 2.13761
BNB price
Solana
Solana (SOL)
$187.95 1.80912
Solana price
XRP
XRP (XRP)
$0.6277400 2.43081
XRP price
Shiba Inu
Shiba Inu (SHIB)
$0.0000321 6.4303
Shiba Inu price
Pepe
Pepe (PEPE)
$0.0000081 5.81543
Pepe price
Bonk
Bonk (BONK)
$0.0000282 10.65997
Bonk price
Bitcoin
Bitcoin (BTC)
$70,715.00 2.72225
Bitcoin price
Ethereum
Ethereum (ETH)
$3,561.25 1.58493
Ethereum price
BNB
BNB (BNB)
$581.25 2.13761
BNB price
Solana
Solana (SOL)
$187.95 1.80912
Solana price
XRP
XRP (XRP)
$0.6277400 2.43081
XRP price
Shiba Inu
Shiba Inu (SHIB)
$0.0000321 6.4303
Shiba Inu price
Pepe
Pepe (PEPE)
$0.0000081 5.81543
Pepe price
Bonk
Bonk (BONK)
$0.0000282 10.65997
Bonk price
Bitcoin
Bitcoin (BTC)
$70,715.00 2.72225
Bitcoin price
Ethereum
Ethereum (ETH)
$3,561.25 1.58493
Ethereum price
BNB
BNB (BNB)
$581.25 2.13761
BNB price
Solana
Solana (SOL)
$187.95 1.80912
Solana price
XRP
XRP (XRP)
$0.6277400 2.43081
XRP price
Shiba Inu
Shiba Inu (SHIB)
$0.0000321 6.4303
Shiba Inu price
Pepe
Pepe (PEPE)
$0.0000081 5.81543
Pepe price
Bonk
Bonk (BONK)
$0.0000282 10.65997
Bonk price

IBM and OMFIF Report Reveals Central Banks Fear Digital Efficiency

This article is more than 4 years old
News
IBM and OMFIF Report Reveals Central Banks Fear Digital Efficiency

Central banks across the globe have been reserved in their approach to digitization. These institutions are huge proponents of digital payments channels on a retail level, but when it comes to digitizing all currency, their worst fears kick in. According to a report published by IBM and the Official Monetary and Financial Institutions Forum (OMFIF), central banks opposed currency digitization because they fear it will boost efficiency and make bank runs vastly quicker, as reported by Ledger Insights, October 29, 2019.

Nurturing the Monetary Monopoly

A year ago, IBM and OMFIF teamed up for a report on wholesale central bank digital currencies (CBDCs), and they managed to find incredible synergies that could be created if countries digitized their currencies. This sentiment, however, was not echoed by the central banks they surveyed. Of the 23 central banks whose comments were included in the report, 13 were from developed markets, 10 from emerging markets, and all of them agreed that private currencies threaten financial stability.

The survey makes one trend crystal clear: CBDCs will only be considered if they support the agenda of monetary monopoly. 83 percent of central banks believed their role would remain the same even if a CBDC was launched, and 43 percent believed it was feasible to establish strictly domestic use cases for digital currencies.

One of the more important observations is that the speed of digital currencies brings in a host of problems for financial regulators. Their duty is to safeguard the system, and by increasing the speed by which customers can access their funds, they believe the risk of a bank run massively increases.

Central banks believe private financial institutions and technology companies will play a huge role in the next wave of financial innovation. But this innovation must be limited to retail payments, for entering the domain of currency issuance and management is nothing short of a sin in the eyes of a central banker.

Suddenly, Then all at Once

It isn’t every day you hear about an idea being rejected because it is “too efficient”. But this is exactly what happens when innovation knocks on the doors of regulators. Central banks are inherently biased toward a system where they retain their monopoly over currency issuance and have the highest authority for managing total money issuance (commercial banks, bond markets, etc); this is completely understandable from their viewpoint.

The problem with said approach has been highlighted time and time again. Innovation plays nicely at the start by knocking on your door, but then one fine day, it breaks the door down. What then?

Suppressing innovation has historically never worked out for governments. Even smaller advancements in the realm of privacy like PGP are popular today despite the United States government attempting to charge Phil Zimmerman, the creator of PGP, with arms trafficking. All this for developing a communication encryption standard.

Follow Us on Google News