BIS: Central Banks Undertaking “Extensive Work” on Digital Currency
The Bank of International Settlements (BIS), the de facto central bank of the world’s central banks, continues to do its homework on blockchain-powered central bank digital currencies, or CBDCs.
On January 23rd, the influential international institution published a new report titled “Impending arrival – a sequel to the survey on central bank digital currency.”
Therein, the BIS-sponsored authors found that a considerable swath of the world’s top banking operations weren’t just researching CBDCs, but rather were already putting their research efforts into action.
CBDCs Can No Longer Be Ignored
This new report from the BIS isn’t the organization’s first on the subject of CBDCs, but the latest report’s fresh findings suggest the beginning rumblings of a shifting playing field are already well underway for central banks.
That shift, of course, is being driven by the wide open possibilities that programmable money — a new innovation in civilization, courtesy of blockchain and smart contracts tech — can obviously bring about.
As such, a sort of tipping point for these institutions seems to have been hit, as a non-trivial amount of them are now seriously working on CBDC initiatives and their numbers seem only set to swell further in the years ahead. As the report’s authors noted:
“Our survey shows that central banks are undertaking extensive work on central bank digital currencies. Globally, emerging market economies are moving from conceptual research to intensive practical development, driven by stronger motivations than those of advanced economy central banks. Central banks representing a fifth of the world’s
population say they are likely to issue the first CBDCs in the next few years.”
Some Banks Are Closing In Fast
Later on, the report’s authors concluded that while many central banks have yet to embrace digital currency tech, the institutions that are farthest along in their CBDC development efforts are on notably on the cusp of releasing finished products to the public:
“Although motivations are fairly stable, central banks with firmer plans to issue CBDC are now imminently close to doing so. Some 10% of the central banks surveyed are likely to issue a CBDC for the general public in the short term, representing 20% of the world’s population.”
That’s an impressive projection, and it shows just how far the maturing digital currency arena has climbed in one decade’s time. If one-fifth of the globe’s populace gets access to their respective nations’ CBDCs in the coming years, then it seems like it’d only be a matter of time after that until the two-fifths population mark was hit, and then beyond.
Built on Ethereum?
This month, Ethereum venture studio ConsenSys published a related report dubbed “Central banks and the future of digital money.” The document’s subtitle? An overview and proposal for central bank digital currency on the Ethereum blockchain.
In this report, ConsenSys outlined what stablecoins and CBDCs were, and it also concluded by offering a “proposed architecture for Ethereum-based central bank money.”
In other words, the organization envisions a future where most CBDCs can live fruitfully on Ethereum, the cryptoeconomy’s reigning smart contracts platform. As ConsenSys went on to argue:
“Ethereum is by nature well suited to the creation of tokens. Central banks could easily design and implement tokens that can be widely circulated yet whose issuance and destruction remain firmly under their control. As these tokens live natively on the network, they do not depend on a single issuer who establishes point-to-point private communication channels with each participant.”
In remains to be seen how the next 10 years will go for the cryptocurrency ecosystem. But if ConsenSys has its way, the first CBDC launch on Ethereum will occur — a development that would undoubtedly usher in a new era for the platform.
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OhNoCryptocurrency via https://www.ohnocrypto.com/ @William M. Peaster, @Khareem Sudlow