IBM, the international tech giant, recently issued a report that is quite bullish on digital currencies issued by central banks. The company collaborated with the Official Monetary and Financial Institutions Forum to create the report. This report is intended for use by economic commentators, industry specialists, and policymakers. They prepared the report by surveying two dozen central banks in developed and emerging economies. Along with IBM sharing feedback on central bank digital currencies, Visionary Financial had recently talked about France covering the same topic. It seems like this focus point is becoming quite appealing globally..
The Timeline for Central Bank Digital Currencies
According to the report, central banks will begin issuing digital currencies within the next five years. They claim that central banks will issue these coins as a substitute or complement to fiat currencies. The report claimed that smaller economies were more likely to try a CBDC in its true firms before larger banks. It goes on to claim that it is unlikely a member of the G20 will be the first to issue a central bank digital currency. A smaller economy will most likely launch such a coin with a specific use case or policy objective. For instance, it may be issued to improve the resilience and effectiveness of a national payment system by reducing the use of hard cash. Besides that, it could be used to expand inclusion in the formal financial sector. Alternatively, it could be for a smaller purpose such as improving international transmissions by migrant workers.
The Report is Not Supportive of Privately Issued Coins Such as BTC
In the report, there is a section dedicated to coins such as BTC. It claims that it does not foresee a future of mass adoption for such coins. One of the main reasons for this is suppression by governments that want to maintain their monopoly in the financial world. Besides that, the report claims that currencies such as BTC will largely be used in speculation and illegal use cases on the dark web.
A Lot is going on in the CBDC Arena
This report comes at a time when reports are emerging of central banks planning to issue digital currencies. For instance, Xi Jinping, the president of China recently made ripples in the crypto world when he said that the blockchain would become a core technology in China.
In September, a former official of the Chinese central bank said that a digital currency issued by the central bank would help the nation maintain sovereignty over its money supply. Even the US is considering a digital currency. Lawmakers recently questioned the central bank governor over the issue.
A while back, the former Chair of the CFTC called for the USD to be moved to the blockchain. He said that this was one way to help deal with the threat to the global dominance of the USD. Their proposed digital dollar would work by players bringing in fiat cash, which would be exchanged for digital dollars. Other nations such as Venezuela and the Bahamas have also been looking into digital currencies. The Bahamas plans to issue its digital currency in the next few months.
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