Central banks from different continents, including Europe, Asia and North America, have joined forces to evaluate the possibility of issuing national digital currencies as well as associated with it benefits and risks. The debate on the topic of CBDC has accelerated noticeably in recent months due to Facebook's pressuring the launch of the Libra project.
Central banks are working together on the CBDC case
According to Reuters, the biggest central banks in the world are thinking about the possibility of issuing their own digital currencies, i.e. CBDC. Currencies like that are regarded as traditional money, but in digital form which is issued and managed by the given country's central bank. The information was given on Tuesday by the Bank of England (BoE) and the European Central Bank (ECB) during a fierce discussion about the future of money and about people controlling it.
Central banks of the European Union, Great Britain, Switzerland, Sweden, Canada and Japan will be sharing their experience in a newly created group led by former ECB official, Benoit Coeure, and BoE Vice President, Jon Cunliffe. The group is also supported by the Bank for International Settlements (BIS), that is the bank of banks, by a great number of people regarded as the most important bank in the world which is, behind the scenes, influencing the politics and economy of the world.
The main goal of the group is to "share experience as they assess the potential cases for central bank digital currency in their home jurisdictions". First and foremost, the group is designed to evaluate the use of CBDC as well as economic, functional and technical aspects related to digital currency and to share knowledge about emerging technologies.
Because of the fact that Facebook keeps pressuring the launch of its digital currency, Libra, central banks around the world have accelerated the pace of works on their own digital currencies. Although the social media giant's project came to a standstill, due to attacks by regulators, politicians and officials, bank projects are gaining developing faster.
The debate concerning the digital currency supported by the central bank escalated even more when Mark Carney, the CEO of the Bank of England, said central banks need to merge in order to create a replacement reserve currency as an alternative to the US dollar. Carney believes that the best solution would be a diversified multipolar financial system, something that technology can provide. He stated that Libra is by far the best known proposed digital currency, but has encountered many problems that it has not yet dealt with.
Among the central banks, the leader in the pursuit of creating their own digitized money is currently the People's Bank of China (PBOC), which is already testing CBDC. However, little is still known about the details of the project...