John Keefe: “Central Bank Digital Currencies Should Work Autonomously”

Former IMF financial sector expert John Kiff believes that in order to achieve mass adoption, central bank digital currencies must work without the use of Internet technologies.

AT publications On the website of the International Monetary Fund (IMF), John Kiff writes that Central Bank digital currencies (CBDC) should work offline. Such technology already exists, he says, in the form of stored-value cards, which were introduced in the 1990s. Keefe, who previously served as the IMF’s Senior Financial Sector Expert for FinTech and Digital Currencies, believes CBDCs should be recognized around the world.

“As the world’s central banks rush to issue digital currencies, almost all of their research and testing is focused on Internet technologies. But what happens when the network goes down during a war or natural disaster? What about the 75% of the world’s poorest adults who don’t even have internet access?” Kiff writes.

A former IMF expert noted that banks need to look to the past in order to take experience from there and apply it in the present. So, in 1993, the Central Bank of Finland became the first in the world to put into practice the concept of autonomous digital currencies of the Central Bank by launching the Avant card system. It was designed to store offline payments using a card reader. However, it was abandoned in 2006 when debit cards supported by smart card technology became available.

In addition, in 1995 Westminster Bank in the United Kingdom launched a stored value payment platform called Mondex, now part of MasterCard Worldwide. This is a smart card with a chip that allows you to transfer cash without a signature, PIN or authorization.

Earlier, former International Monetary Fund economist Kenneth Rogoff said that governments are far from developing adequate regulation of cryptocurrencies, so they are trying to create their own digital currencies.