The behaviour of central banks facing new cryptocurrencies
Do you remember when we talked about bank decentralization? It was a subject that frightened many, but that opened the road of hope to others. Central banks are reluctant to use these virtual currencies, but the truth is that some of them have already think about issue them. Do they perhaps doubt about the benefits?
We have just begun a new year and we already have the first study published by BIS and by Christian Barontini and Henri Holden. They claim that only a few central banks expected to use this type of coins over the next six years, even though many of these organisms seem to have clarified the challenges of launching digital coins from the Central Bank (CBDC).
How have they made this research?
As indicated in the crypto news web portal, "at the end of 2018, BIS conducted a survey among 63 central banks, 41 of them in emerging markets and 22 in advanced economies, which represent about 80% of the world's population. These organizations were asked about his current work on the CBDC, their motivation on the subject and odds that they emit this type of digital coins".
The reflection of a breakthrough
A couple of years back, it was unthinkable for banks the use of cryptocurrencies, but it seems that the years have not gone in vain against their decisions. The question is no longer ‘do I use cryptocurrencies or not?’ Now, the question extends to opt for state or supranational cryptocurrencies, which shows that they have already become aware of its use.
There are many questions that we have done over the past years to find an immediate answer. Answer if central banks issued cryptocurrencies or not is something that we will see over time, but we can pay attention to the opinion of these. José Manuel González Páramo, BBVA Executive Director, believed on the issuance of virtual currencies by central banks in the coming years. All this will be possible thanks to the progress of the blockchain technology, who proved to be a perfect ally in security issues.
Why central banks bet on cryptocurrencies?
Among all the reasons that go through our head, we have found four that respond accurately to the causes that justify the possible bet on virtual coins. As an example, the improvement of the interbank market through the use of blockchain technology for payment systems; the improvement of the global system of physical cash; get enhanced monitoring or systematic financial risk reduction; and turn this initiative into a monetary policy tool.
The capital Objectivity, or a fixed pricing, puts into question a credit system that has expanded far above their abilities. Planetary debt surpasses a 300% the gross domestic product, which is significant of the short- and medium-term economic turbulence, as are values equivalent to 3 times the Earth.
Untenable is the word that best defines the financial situation of the planet, and the crypto-markets are positioned as an alternative to balance, adjust to the needs in a realistic way.
There will always be a risk on everything, but the fear is always the trigger of a brake which prevents you from moving forward. For this reason, from Davies we insist on the need to invest, bet and leaving the comfort zone that keeps us stuck in the depressive tendency of the economy, being the opacity the cornerstone of this historical process.
A story with a future
It's been 10 years since the launch of the Bitcoin. Throughout this time, central banks have spoken out to give their opinion about the present and the future, as a sort of oracle whose ball envelops a promising future.
The cryptocurrencies are no longer anything, but a reflection of a financial system where power is no longer under the banks, but the people, physical or legal, the real owners of their money. We have seen how the Bitcoin mining used more energy than 160 countries in the world. We've observed the arrival of Ripple, the second cryptocurrency. And we have witnessed other thousands who have emerged later. Yes, always introducing a little improvement. It is the reflection of a society that walks slowly, but that treads strong.