cryptocurrency

Central Bankers Talk Down Concerns Over Digital Currency Risks


2/2

© Bloomberg. Benoit Coeure, executive board member of the European Central Bank (ECB), speaks during the central, eastern and south-eastern European economies (CESEE) conference at the European Central Bank (ECB) headquarters in Frankfurt, Germany, on Wednesday, June 12, 2019. International Monetary Fund leader Christine Lagarde called on governments to de-escalate current trade disputes and instead work to fix the global system. Photographer: Andreas Arnold/Bloomberg

2/2

(Bloomberg) — Sign up for the New Economy Daily newsletter, follow us @economics and subscribe to our podcast.

Central bankers sought to play down concerns that their efforts to develop digital currencies will take business away from the financial industry.

Benoit Coeure, the head of the Bank for International Settlement’s Innovation Hub, which was expanded to Stockholm on Wednesday, said commercial lenders should look at central bank digital money “as an opportunity that will enable them to offer new services to their customers, as part of a broader set of new technologies.”

Monetary authorities from Sweden to China are working on their own digital currencies as the dwindling use of notes and coins threatens to upend traditional payment methods. Meanwhile, the emergence of cryptocurrencies such as has added to pressure on central banks to ensure they have a viable alternative before unregulated payment forms take over.

But the prospect of a digital currency controlled by central banks has some corners of the commercial banking world worried, amid concerns they’ll lose control of customer flows. Fitch Ratings recently warned that the widespread adoption of CBDCs could disrupt financial systems if not properly managed. Risks include the sudden flow of funds into CBDC and out of bank deposits.

Read More   Swedish Crypto Exchange QuickBit Announces User Data Breach - Cointelegraph

Coeure said the most likely setup will be a two-tier model, whereby digital currencies would be issued by central banks but distributed by commercial lenders.

Cecilia Skingsley, the first deputy governor of Sweden’s Riksbank, said central banks will play a “focused and narrow role” in providing the infrastructure on which the private sector can build, “and that’s where we are going to stay.”

Central bank digital currencies shouldn’t be about “changing the way the financial system works,” Coeure said.

Read More: Federal Reserve’s Digital Dollar Push Worries Wall Street

©2021 Bloomberg L.P.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





READ SOURCE

Leave a Reply

This website uses cookies. By continuing to use this site, you accept our use of cookies.