This Wednesday, at a roundtable at the Deconomy event in Seoul, Anthony Lewis, research director of the global banking consortium and the R3 company specializing in Blockchain technology, predicted that a form a form of cryptographic currency of central bank could be commissioned for this year.
And this first big Blockchain conference held in South Korea actually supports this possibility. Apparently, this new cryptocurrency, the Central Bank issued Digital Currency (CBDC) would have a legal status of submission that will depend on the law or regulation of the government.
Cryptographic currency with limited use
According to Anthony Lewis’ statement, the use of the CBDC is still under analysis. Indeed, the director said he has already had exchanges with central banks to provide solutions to address payment problems.
And apparently, they expect to adopt a system using Blockchain technology. However, access to this currency would only be reserved for certain financial institutions to start contrary to what the big one might think. As a result, ordinary users will not have a new payment choice similar to Bitcoin or Ethereum at the moment.
According to the explanations of the director of the company R3, it could also be that this solution is only used in specific situations such as disaster recovery for example. All this because of the limitation imposed.
A solution that would bring many benefits
Several researchers operating in the financial sector have recognized that the CBDC could bring many benefits to users. The adoption of such a system would indeed benefit from the advantages of online payments, offer better financial inclusion and offer greater security for consumers who rely on the traditional banking system. In addition, new, widely available, interest-generating cryptocurrency would help strengthen the links between the economy and monetary policy.
However, it is important to know that in the event that this initiative generates interest, it would affect both CBDC demand, the government bond, bank deposits and the demand for cash. Especially since some reports have already shown that tests performed on inter-bank cryptographic currency transactions have not proved very useful.
Some seem to be against the idea of the project
Like Stanley Yong, a former CBDC researcher at the Singapore central bank and a global director of CBDCs at IBM who said such a system might be more appropriate for commercial banks, it is clear that some sector players do not share the same opinion as Anthony Lewis.
For example, financial cryptographer Ian Grigg has announced that issuing a retail CBDC may not be the primary role of central banks. He even added as an example that the institution’s policy for the Bank of England is to support at all costs the deposit of commercial banks.