06 Feb 2020 Simon Briggs
Gathering Of Six Central Banks To Discuss Digital Currencies Scheduled For April
Britain, the Еurozone, Japan, Canada, Sweden and Switzerland are ready for a joint research venture into the world of digital currencies, reported the Japanese newspaper Nikkei on February 5, 2020. The collaboration was previously announced in late December, but now the leaders of the six banks agreed to hold a meeting in Washington, D.C, scheduled for mid-April 2020.
The main goal of the research group is to examine the positive and negative sides of the newly-arising digital currency economy, as well as to have debates over the future of the financial world, at least from the perspective of central banks.
One of the key topics of discussion will be how central banks can compete with projects like Facebook's Libra. Also, the group will examine potential security problems in a possible central bank-issued digital currency scenario.
However, the Bank of Japan (BOJ) executive mentioned the workgroup still has no fixed timetable, as the digital sector evolves rapidly. "We have to stay relevant to the current situation, as money issuers, as the world around us is constantly changing," the executive added.
Takako Masai, Bank of Japan's board member, told Nikkei that BOJ does not plan to issue a native CBDC at this point. "However, if public demand for central bank-issued digital currencies arises drastically, we must be prepared and ready to respond with such a product," Masai added.
Central banks are still pessimistic about the implementation of CBDCs in their workflow. However, China is one of the first major countries to develop such digital currency. Developed by the Peoples Bank of China (PBoC), the "digital yuan" is set to replace the fiat form of China's domestic currency, as President Xi Jinping urged authorities to "support the development of blockchain applications and businesses in China." Despite Jinping's “green light”, China remains cautious towards blockchain and digital currencies.
Meanwhile, Venezuela seeks further ways to promote its state-issued digital currency – Petro. Venezuela's oil reserves will be backing the Petro currency. Petro was issued in times when the Venezuelan Bolivar suffers from hyperinflation and the U.S. embargo was blocking Venezuela's economy.
On the other hand, central banks are facing a new rival in the face of Facebook's Libra project. The stablecoin project continues its development, despite causing regulatory havoc and head-on collisions with the Securities and Exchange Commission in the United States. Mark Zuckerberg's stablecoin raised the question do nations have to continue with their control over currencies for the next few decades.
Furthermore, Japan is getting one step ahead of the six countries, as Japanese lawmakers will release digital currency guidelines to "combat" the digital yuan. Norihiro Nakayama, a senior lawmaker in Japan, told Bloomberg that China's digital yuan "would bring a great challenge to the existing monetary system."
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