ARMONK, N.Y. and LONDON, Oct. 29,
2019 /PRNewswire/ -- Policy-makers at a number of central
banks around the world are seriously considering developing and
issuing a central bank digital currency (CBDC), with a
consumer-ready CBDC likely to arrive in the next five years. That
is the key finding from a report from IBM (NYSE: IBM) and OMFIF, a
central banking think tank.
The report, commissioned by IBM, encompasses an in-depth survey
of officials from 23 central banks in advanced and emerging
economies. The findings present a holistic picture of
policy-makers' approaches to setting up a retail CBDC. The survey
projects that the first CBDC will be produced within five years in
a small economy and respond to a specific policy objective with
a well-defined use.
A consumer-ready CBDC is likely to require some form of
public-private partnership. Central banks are hampered in their
ability to offer financial services, and private companies will
probably fill the gap.
Without regulation, private sector digital currencies could
possibly undermine central banks' monetary sovereignty and
threaten financial stability. Central banking policy-makers and
regulators increasingly acknowledge that understanding and, where
appropriate, incorporating these technologies into their own
functions may have to be an essential part of their mandate.
Key findings:
- In dealing with digital currencies, policy objectives will
remain central bankers' pre-eminent concern; advances in technology
alone will not determine how CBDCs are designed or whether they
will be introduced.
- 73% of central bank survey respondents would require retail
CBDCs to be available under all circumstances and for all types of
payments where cash is currently used.
- More than half of respondents said they were very concerned
about the possibility that private challengers like Libra would
critically undermine monetary sovereignty.
- 82% of those responding said their greatest financial stability
concern from CBDC implementation was the risk of digital bank
'runs' which could damage stability and confidence.
- 64% of respondents said outsourceable 'intermediation'
functions, such as customer onboarding, would be important for CBDC
implementation.
'The concept of retail CDBCs has moved rapidly from being the
thought experiment of technical experts and philosophers to the
subject of boardroom debates focused on tangible, near-term
reforms,' said Philip Middleton,
OMFIF deputy chairman. 'When senior central bankers speculate
publicly about the possibility of a universal digital currency, it
is a happy endorsement of the reports' timeliness.'
'Central banks surveyed are interested in positioning themselves
to launch their own retail CBDCs, as the findings of this report
make clear,' said Saket Sinha,
global vice president, IBM Blockchain Financial Services. 'Large
banks and technology companies will have a major role to play as
new public private partnerships are formed to promote
interoperability, create services, and extend financial
inclusion.'
The survey was conducted between July-September 2019, involving central banks from 13
advanced economies and 10 emerging markets.
The study, Retail CBDCs, The Next Payments Frontier, is
available here.
For further information about OMFIF, please visit:
www.omfif.org
For further information about IBM Blockchain, please visit:
https://www.ibm.com/blockchain/solutions/world-wire
OMFIF
Stefan Berci
Communications Manager
Stefan.berci@omfif.org
+44 02078562401
IBM
Christina Trejo
Christina.trejo@ibm.com
1-212 671 9582
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SOURCE IBM