This is what the world’s central banks think about Bitcoin


Eight years since the birth of bitcoin, central banks around the world increasingly recognize the potential advantages and disadvantages of digital currencies.

The guardians of the global economy have two problem groups to address. In the first place, what to do, in any case, with the appearance and growth of private cryptocurrencies. Second, if you issue official versions.

The following is a description of how the world's largest (and some smaller) central banks are approaching the issue:

EE. US: Privacy Concern

The Federal Reserve's investigation into cryptocurrencies is in its early days, and has not been openly enthusiastic about the idea of ​​a response issued by the central bank to Bitcoin. Jerome Powell, board member and presidential candidate, said earlier this year that technical problems remain with technology and that "governance and risk management will be fundamental." Powell said there are "significant" challenges for a central bank cryptocurrency, that privacy issues could be a problem, and private sector alternatives can do the job.

Euro zone: tulip type

The European Central Bank has repeatedly warned about the dangers of investing in digital currencies. Vice President Vitor Constancio said in September that bitcoin is not a currency, but a "tulip", an allusion to the seventeenth-century bubble in the Netherlands. The colleague Benoit Coeure warned about the unstable value of Bitcoin and the links with tax evasion and crime create significant risks. President Mario Draghi said earlier this month that the impact of digital currencies on the euro area economy was limited and did not pose a threat to the monopoly of central bank money.

China: Conditions & # 39; Matures & # 39;

China made it clear: the central bank has full control over cryptocurrencies. With a research team established in 2014 to develop digital fiduciary money, the People's Bank of China believes that "the conditions are ripe" for it to adopt the technology. But it has taken energetic measures against the private digital emitters, prohibiting the exchange of bitcoins and others. While there is no formal start date for introducing digital currencies, authorities say that going digital could help improve payment efficiency and allow more precise control of currencies.

Japan: mode of study

Haruhiko Kuroda, governor of the Bank of Japan, said in October speech that the BOJ does not have an imminent plan to issue digital currencies, although it is important to deepen the knowledge about them . "The issuance of CBDC (digital currency of the central bank) to the general public is as if a central bank extended access to their accounts to anyone," Kuroda said. "As such, the discussion on CBDC takes up fundamental issues of central banking."

Germany: "Speculative toy"

In a country where many citizens still prefer to pay in cash, the Bundesbank has been particularly cautious with the emergence of bitcoin and other virtual currencies. Board member Carl-Ludwig Thiele said in September that bitcoin was "more a speculative toy than a form of payment". A change in blockchain deposits would disrupt banks' business models and could disrupt monetary policy, Thiele said. At the same time, the Bundesbank has been actively studying the application of technology in payment systems.

United Kingdom: Potential "Revolution"

Bank of England Governor Mark Carney has cited cryptocurrencies as part of a potential "revolution" in financing. Last year, the central bank started a financial technology accelerator a Silicon Valley practice to incubate young companies. Carney says blockchain-based technology, the distributed accounting database, shows "great promise" by allowing central banks to strengthen their defenses against cyber-attack and review the way in which payments are made between institutions and consumers. . However, he warned that the BOE is still far from creating a digital version of the pound sterling.

France: "great caution"

Bank of France Governor Francois Villeroy de Galhau said in June that French officials "advise great caution" with respect to bitcoin because there is no public institution behind that gives confidence. In the story, all the examples of private currencies ended badly. Bitcoin even has a dark side: there were data attacks. "He said that" those who use Bitcoin today do so at their own risk. "

India: not allowed

The central bank of India is opposed to the given cryptocurrencies They can be a channel for money laundering and terrorist financing, but the Reserve Bank of India has a group that studies whether digital currencies supported by global central banks can be used as legal tender. , the use of cryptocurrencies is a violation of the exchange rules.

Brazil: Support innovation

The Central Bank of Brazil "does not see an immediate risk to the Brazilian financial system", but remains alert to the evolution of the Use The bank promised "to support financial innovation, including new technologies that make the financial system safer and more efficient."

Canada: Asset-Like Senior Deputy Governor of the Bank of Canada, Carolyn Wilkins, who leads the cryptocurrency research, said in an interview this month that cryptocurrencies are not real money forms. "This is really an badet, or a value, and therefore should be treated that way," said Wilkins. Like others, she saw distributed accounting technology as promising to make the financial system more efficient.

South Korea: Crime Watch

The Bank of Korea's approach is to protect consumers and prevent cryptocurrencies from being used as a tool of crime. Lt. Gov. Shin Ho-soon said earlier this month that more research and monitoring was needed.

Russia: & # 39; Pyramid Schemes & # 39;

The Russian central bank has expressed concern about the potential risks of digital currencies, with Governor Elvira Nabiullina saying "We do not legalize pyramid schemes" and "we are totally opposed to private money, regardless of whether it is in physical or virtual form ". At the moment, the Bank of Russia prefers to delay a decision on the regulation of financial instruments unless President Vladimir Putin urges the action before. The central bank will work with prosecutors to block websites that allow retail investors to access bitcoin exchanges, according to Sergey Shvetsov, deputy governor.

Australia: close monitoring

The Reserve Bank is closely monitoring the rise of digital currencies and recognizes the technology that underpins Bitcoin has the "potential of widespread use in the financial sector and many other parts of the economy ", said the policy of the head of payments Tony Richards the last month.

Turkey: Important element

Digital currencies can contribute to financial stability if well designed, said Turkish Central Bank governor Murat Cetinkaya in Istanbul earlier this month. Digital currencies present new risks for central banks, including controlling the supply of money and price stability, and the transmission of monetary policy, Cetinkaya said. Even so, the Turkish central banker said that digital currencies can be an important element for a cashless economy, and the technologies used can help to accelerate and make payment systems more efficient.

The Netherlands: Most Daring

The Dutch have been among the most daring when it comes to experimenting with digital coins. Two years ago, the central bank created its own cryptocurrency called DNBcoin, only for internal circulation, to better understand how it works. Presenting the results last year, Ron Berndsen, who was in charge of the project, said that blockchain can be "naturally applicable" in the arrangement of complex financial transactions.

Scandinavia: Exploring Options

Like the Dutch, some Nordic authorities have been at the forefront of exploring the idea of ​​digital cash. The Swedish Riksbank, the oldest central bank in the world, has search options that include a digital e-crown based on digital records, with balances in central database accounts or with values ​​stored in an application or in a card. The bank says that the introduction of an electronic crown represents "no major obstacle" to monetary policy.

In an environment of declining cash usage, the Norges Bank of Norway is looking for possibilities such as individual accounts at the central bank or plastic cards. or an application to use for payments, he said in a May report. Denmark has regressed a bit since the initial enthusiasm, and Lt. Gov. Per Callesen warned central banks last month to offer digital currencies directly to consumers. One argument is that such direct access to liquidity from the central bank could contribute to runs at commercial banks in times of crisis.

New Zealand: Considering the future

The Reserve Bank of New Zealand, once a pioneer on the world stage with its early introduction of an inflation target, said on Wednesday that it is considering its future plans for the issuance of currencies, and how digital units can fit into those strategies. "Currently, work is being done to evaluate the future demand for New Zealand's fiduciary currency and to consider whether it would be feasible for the reserve bank to replace the physical currency that currently circulates with a digital alternative," the RBNZ said in what it called . badytics.

Morocco: violation of the law

Representing one of the most severe reactions, the country has considered that all transactions involving virtual currencies violate exchange regulations and are punishable by law. The cryptocurrencies are equivalent to a hidden payment system, not backed by any institution and involving significant risks for its users, authorities said in a statement this month.

Bank for International Settlements: Can not ignore

The central bank for central banks has said that policy makers can not ignore the growth of cryptocurrencies and will probably have to consider whether it makes sense for them to issue their own digital currencies at some point. "Bitcoin went from being a dark curiosity to a familiar name," the BPI said in September. One option is a currency available to the public, with only the central bank capable of issuing units that would be directly convertible into cash and reserves. However, there could be a greater risk of bank runs, and commercial lenders could face a shortage of deposits. Privacy could also be a concern.

– With the help of Pooi Koon Chong, Suttinee Yuvejwattana, Siegfrid Alleged, Yinan Zhao, Paul Abelsky, Ahmed Feteha, Mark Deen, Jill Ward, Anirban Nag, Peter Levring, Kati Pohjanpalo, Nick Rigillo, and Piotr Skolimowski

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