Central Banks Haven’t Made a Good Case for Digital Currencies: WSJ’s Heard on...
Central banks are rushing into digital currencies without considering how the risks might outweigh any benefits, the column argues.
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Researchers at the International Monetary Fund (IMF) have examined the central bank laws of 174 IMF members to answer the question of whether a digital currency is really money. They found that of all the central banks studied, only about 23%, or 40 central banks, “are legally allowed to issue digital currencies.” IMF Explores if Digital Currency Is Money The IMF published a blog post on Thursday exploring whether digital money is really money in the legal sense. The post is authored by Catalina Margulis, a consulting counsel in the IMF Legal Department’s Financial and....
At a speech in Rome yesterday, Yves Mersch of the European Central Bank reiterated the bank’s stance on cryptocurrencies from 2012, but warned that such currencies should not be ignored. Essentially, Mersch’s comments were that digital currencies were still too small to be of any consequence at the moment — a key part of the Virtual Currency Schemes report from October 2012, when bitcoins were trading for tens of dollars. “Many media commentators have been wondering what impact these currencies will have on retail payments and even on central banks,” he said. “I agree that virtual currency....
Bitcoin and Blockchain are technologies which have the potential to dramatically change the world. If Blockchain technology is deployed rapidly and effectively, we can bank the unbanked, automate contracts and even get Blockchains to work with the Internet of Things (IOT) to create a Blockchain of Things. Yet the primary use of Blockchains remains as a medium to validate cryptocurrency transactions. If that is the case, one must ask the question, how soon before central banks not only accept Blockchain but also start to have more acceptance of Bitcoin and other cryptocurrencies? After all....
The Bank of Canada has joined the list of bank-related institutions to commission research papers regarding the use of digital currencies, particularly Bitcoin. Its two authors came up with an economic framework to analyze their exchange rates. Blockchain as a challenge for central banks. The Bank of England had earlier released a research paper that studied the macroeconomic consequences of issuing central bank digital currency (CBDC). The 2015 paper by the Bank for International Settlements noted that the emergence of distributed ledger technology could present a hypothetical challenge....
With a runway of a year or more before the Federal Reserve and other major central banks can launch digital currencies, bitcoin and other private cryptocurrencies could gain a foothold in electronic commerce.