BIS: Digital Currencies Could Disrupt Central Banking Model
Digital currencies could disrupt the ability of central banks to exercise control over the economy or issue money should the technology scale, the Bank for International Settlements (BIS) said in a new report released today. The BIS, a financial entity cooperatively owned by the world's central banks, said that it has been looking at the technology as early as November 2013, and in February of this year the Committee on Payments and Market Infrastructures (CPMI) asked a working group to draft the report it published today. The report outlines how digital currencies like bitcoin as well as....
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While countries like Bangladesh and Ecuador are outright banning bitcoin and other digital currencies, Italy has taken an interesting first stance on the matter. In a notice on virtual currencies, published on January 30, the Central Bank of Italy acknowledged the use of virtual currencies as legal in their country. The Central Bank of Italy started off their notice with an explanation of digital currency, then noted that the Financial Action Task Force (FATF) published a paper on digital currencies in relation to money laundering and terrorism. The Central Back then explained that the....
Ahead of a session of key cryptocurrency experts in the UK witnessing before the Economic Affairs Committee of the Parliament on Tuesday July 19 to explore blockchain technology, the Bank of England has released a research paper that studied the macroeconomic consequences of issuing central bank digital currency (CBDC). “I don’t see how banks could compete,” said Peter Stella, former central-banking head of the International Monetary Fund and director of Stellar Consulting LLC. The Wall Street Journal suggests that a central-bank-issued bitcoin would be a “means for policy makers to....
The Bank of Canada has released a new document outlining some of their views on bitcoin (and digital currency). Perhaps most interesting, the Canadian Central Bank acknowledged that bitcoin could possibly disrupt global financial stability if its adoption continues to grow. As they do with platform-based digital currencies, central banks are studying and closely monitoring decentralized digital currencies such as Bitcoin. There could be potential risks to overall financial stability if Bitcoin became a significant means of payment and the Bitcoin system remained unstable. It's no surprise....
The Bank of Ghana has said the expected implementation of the central bank digital currency will not disrupt or negatively impact the operations of mobile money operators. Rather, the central bank expects the digital currency to improve the efficiency of Ghana’s settlement systems as well as to “fast-track cross border trade.”
CBDC to Complement Mobile Money
The Ghanaian central bank has moved to allay fears that the implementation of the central bank digital currency (CBDC) known as the e-cedi might adversely impact the operations of mobile money operators....
A staff working paper written for the Bank of England postulates that central bank issued digital currency (CBDC) of 30% of GDP could permanently raise GDP by as much as 3% from lower real interest rates, taxes and monetary transaction costs, according to a recently published paper. The CBDC would be issued against government bonds. The paper, “The macroeconomics of central bank issued digital currencies” by John Barrdear and Michael Kumhof, examines the macroeconomic impact of a central bank issuing electronic, national-currency-denominated and interest-bearing access to its balance sheet....