While some banks are beginning to adopt crypto transactions, some other banks are skeptical about joining the trend. However, it is clear that the popularity of cryptocurrency is growing rapidly, and it does not look like the prediction about it being a bubble that would burst soon, is anything to go by.
In recent times, we have seen different central banks come up with different stance on the issuance of cryptocurrency and digital assets, and according to the chief cashier of the Bank of England, Sarah John, it is important that central banks swing into action, as a way to prevent the tech giants from being dominant in the financial sector. She added that it was imperative that the central banks paid attention to the prospects of digital fiat issuance inclusion. Furthermore, Sarah John explained that the central banks need to function as an institution and come up with plans and strategies that will position themselves relevantly in the society, and boost the confidence in users, while also making it clear that the banks have wide range of transaction options for the users to pick from. She wants banks to promote financial and monetary stability, while getting the private and public sector involved.
Recently, the Financial Stability Board made an announcement, stating that the government should expedite the development of regulations to guide the use of stablecoins and cryptocurrencies. This is indicative of the fact that the government’s complacency in regulating cryptocurrencies could be the undoing of banks, as it is evident that cryptocurrencies tend to make transactions easier than banks and fiat currencies.
A survey was carried out by Ipsos Mori recently, and the results showed that about 51% of the participants in the survey supported central banks being in charge of developing digital currencies, in place of giant tech companies. In January, it was reported by the Bank for International Settlements that some central banks are likely to come together to create and launch central bank digital currencies (CDBCs).
Interestingly, blockchain and cryptocurrency are not waiting for the banks to join them on their quest, because the developers are working day and night to create new innovations, as well as make the technologies better for everyone. If central banks intend to be part of the trend and not get sidelined, then it is important that they come together and act fast, or risk exclusion. The central bank of Lithuania carried out a study in December, 2019, and at the end of the study, it reached the conclusion that the present operations of central banks do not have all it takes to cater to the needs of citizens in different parts of the world who are looking for secure, trustworthy, safe, and cost-efficient methods to facilitate cross-border payments, and as such emerging technologies of the modern day have the solutions.
