The first day of the European Blockchain Convention focused on the most relevant topics for the crypto ecosystem. For the most part, they touched on hot discussions of controversial topics among users. And this panel focused on talking about central bank digital currencies (CBDC).
Some central banks have begun to weigh the possibility of issuing their own digital currencies at some point. Although expanding access to digital forms of central bank liabilities is not a totally new idea in recent times, the debate has been motivated by several factors.
Among them, it is worth mentioning the interest in technological innovations applicable to the financial sector, the appearance of new participants in the markets of and the growing attention that the so-called private digital tokens receive.
Can new digital technologies reach central banks?
Financial institutions already have their own digital accounts and CBDC, it is something that is not a secret. So explained Thomas Moser, alternate member of the Governing Board of the Swiss National Bank.
So, How do you pay on the blockchain? The answer to that is Stablecoins. However, stablecoins still present too many problems in the digital market, which are still far from being solved. But with the money emanating from the central bank, you have the guarantee that your money is there, it is movable and possible to insure.
In addition to this, Moser added that the important thing is that these projects to add digital currencies is not just a pilot idea of the traditional financial system. Rather, it is a long-term goal of central banks, it is special of the Bank of Switzerland.
In contrast, Martin Diehl added that authorizing the use of blockchain for global financial entities is something that cannot be fully applied. Well, consider that the problem here is to find solutions to distribute the representation of a fiat currency on a blockchain and analyze the future benefits of such use.
Eliminate cash from global finances or keep it?
Diehl, Head of Payment Systems Analysis at the Deutsche Bundesbank, also explained that the argument for removing cash from financial systems is weak. He asserted that this is not true and that a replacement of cash is not necessary in the long term.
“We still have the cash, and we can’t get rid of it, because cash payments are the payment that really gives us privacy.”
Martin Diehl, Head of Payment Systems Analysis at the Deutsche Bundesbank.
He also added that the private sector has an important role to play in the area of finance. “Your money is private because of institutions like central banks.”
And although it does not mean that you do not expose yourself in a certain way, since of course it subjects you to risks. Like the bank going bankrupt and you lose all your money. It remains the most viable option for global finance over CBDCs, Diehl said.
Finally, all the panelists came to the conclusion that many people have access to digital money from financial institutions is a sign of where we are going in the future.
If financial institutions promoted the use of digital money, and society had more confidence in using it, that could emanate a change in the future.
European Blockchain Convention
In CriptoTendencia we will have special coverage on September 21 and 22 so that you do not miss anything that happens there. For more information about the event, or to participate in it, you can visit its official site.