Bitcoin Global News (BGN)
January 10, 2019 -- ADVFN Crypto NewsWire -- The Bank for
International Settlements (BIS) has published a number of reports
on their research into cryptocurrencies, blockchain technology,
digital ledger technology and the resulting possibility central
bank digital currencies (CBDCs). Much of their research goes into
breaking down the granular differences between these technologies
and how they could foster a more efficient global economy. In their
most recent report, the organization surveyed 63 central banks
worldwide, about their interest, experience with and plans for
these technologies. 41 are based in emerging market economies
(EMEs), and 22 are advanced economies. This represents almost 80%
of the world’s governments, and 90% of economic output.
The study found that about 70% of
central banks are conducting research into CBDC issuance. Further
planning for integration of such things vary considerably, as well
as the goals intended from the technology. Roughly 50% are
currently running CBDC research, pilot projects or
proof-of-concepts. This is 15% increase since their 2017 report.
Only 5% of the central banks are running CBDC proof-of-concepts.
However, the prevalence of the technology will likely continue to
grow, especially regarding interest from BIS.
BIS
The bank is essentially the central
bank of central banks. It provides banking services, but only to
central banks and other international organizations. It was
established in 1930 through an agreement between Germany, Belgium,
France, the United Kingdom, Italy, Japan, the United States, and
Switzerland to facilitate reparations imposed on Germany from the
Treaty of Versailles after World War I. Obviously this did not last
forever, but the organization quickly took took on a much more
general, but vital role to the global economy.
Our mission is to serve central
banks in their pursuit of monetary and financial stability, to
foster international cooperation in those areas and to act as a
bank for central banks.
-
fostering discussion and
facilitating collaboration among central banks;
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supporting dialogue with other
authorities that are responsible for promoting financial
stability;
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carrying out research and policy
analysis on issues of relevance for monetary and financial
stability;
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acting as a prime counterparty for
central banks in their financial transactions; and
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serving as an agent or trustee in
connection with international financial operations.
Goals Facilitated By
Cryptocurrency
The organization is working to make
monetary policy more predictable and transparent among its the 60
central bank members. Two vital aspects of this goal are two of the
most prevalent capabilities related to cryptocurrencies, blockchain
technology, digital ledger technology and CBDCs.
Regulating capital adequacy -
Capital adequacy policy is the checks and balances for equity and
capital assets of central banks to make sure that they are
appropriately valued and reflect the current market conditions or
adequately assess the risk of their trading positions. Tokenized
assets can facilitate built in transparency in this
regard.
Reserve transparency - Reserve
policy ensures liquidity and prohibits banks from creating money in
specific industries or regions without limit. Cryptocurrencies or a
CBDC could perfectly facilitate this kind of
transparency.
CBDC vs.
Cryptocurrency
Traditional cryptocurrencies are
based on an open, public network supported by a public mining
system. CBDCs would likely operate on a centralized network, but
interact with public networks. BIS delineates CBDCs as “wholesale”
(restricted-access digital tokens for wholesalet ransactions
between banks) and “retail.” Retail CBDCs can either be “general
purpose”(functioning similar to fiat, but digital) or
“account-based” (operating similar to exchange traded
products).
By: BGN Editorial Staff