Seven major central banks, including the Federal Reserve Board (FRB), and the Bank for International Settlements (BIS) released a report on the 9th that summarizes the “blueprint” of central bank digital currencies. In addition to the People’s Bank of China (Central Bank) , private companies such as Facebook FB.O are taking the lead in developing digital currencies .
In addition to the Fed, the participating central banks include the Bank of England (BOE), the European Central Bank (ECB), the Bank of Japan, and the Swiss National Bank.
The characteristics of the central bank digital currency are that it is strong and secure, that it can be used free of charge or at low cost, that it is supported by appropriate standards and clear legal framework, that the private sector plays an appropriate role, and that it competes. And innovation is encouraged.
BOE Vice-President John Kanriff, who also chairs the BIS Payments and Market Infrastructure Committee, said lockdown to contain the new coronavirus will increase demand for cashless payments and accelerate the technology to transform money. He pointed out that he was letting him.
Central banks around the world have begun to watch digital currencies since Facebook announced plans for the cryptocurrency “Libra” in 2019. Deputy Governor Kanriff said the private sector needs to be prevented from filling in improperly.
The central bank digital currency is being developed by the People’s Bank of China in advance. The People’s Bank of China says it will spread the yuan to a dollar-dominated world.
Kenji Okamura, a finance minister of Japan’s Ministry of Finance, pointed out on the 8th that China is trying to gain first-mover advantage in efforts toward the development of digital currencies. “The first-mover advantage is something to be afraid of,” he said.
“This is not competition between central banks,” said BOE Deputy Governor Kanriff, saying that no central bank’s digital currency will dominate the world.
Benoit Coule, director of the Innovation Hub at BIS, said the central bank has the advantage of being the first to catch up with the private sector and take the initiative to shape the future.