Central Banks are Opening up to the Idea of Cryptocurrency

The Bank of International Settlements (BIS) in a recently published report stated that most of the central banks operating in its affiliated countries had shown a high interest in understanding the concept of blockchain technology and the related implications of its adoption. Excerpt from the report states that in addition to the change in the method of payment, the type of money used for the financial transactions are also changing. The central banks across the globe are analyzing the prospects of central bank digital currencies (CBDCs). There is a strong public interest in this potentially changing situation, and this report takes a look into the thinking and working of central banks towards the blockchain technology.

Survey and Report

For compiling the report, BIS conducted a survey of 63 Central banks which represent more than 90% of global financial transactions and cover 80% of the world’s population. The survey results reveal that 70% of the central banks covered in the study are either already engaged or about to engage in the work related to the central bank digital currency. Despite this overwhelming number, 85% of the respondents stated that they don’t feel the time is ripe for the issue of official crypto up to three years in the future.

The study also reveals that most of the activities related to blockchain technology and central cryptocurrency are currently focused on studying, analyzing, and debating the concepts that will enable the banks to acquire a comprehensive understanding of these evolving technologies. This even as some of the banks have gone further and started conducting activities like proof of concept and evaluating their results to ensure the practicality of the technology.

Challenges for official crypto

According to the Ethereum World News, BIS has always been skeptical about the benefits associated with the adoption of crypto or for that matter with the central bank digital currency. According to the news forum, BIS published a report in 2018 stating that crypto is not required for optimizing the central banks’ tasks. There are many central banks which have expressed their apprehensions on the concept of official crypto, stating that the issue of central bank digital currency at present is a premature idea. Despite this, some of the countries have made some technological innovations and integrated effective and reliable solutions for enhancing customers’ convenience and security of transactions.

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