All the talk about it, but no one knows how it will end: the digital money. Because the leading Central banks are now working in the world, in particular the European Central Bank (ECB). Regularly, the Bank for International settlements (BIS) encourages this. The Basel-based financial institution are more than 60 Central banks for which this manages the foreign exchange reserves. It also serves as monetary policy and economic think-tank. In its latest annual report, the challenges of the digital payment world to take a wide space. The article was presented on Wednesday a week before publication of the full year report already.
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The great concern of the BIZ, the pace of Innovation in the area of digital payments and assets like Bitcoin, to put this but the Central banks and their money monopoly under pressure. "As innovations emerge increasingly from outside the traditional two-part structure, which is provided by Central banks and commercial banks, need to master the decision-makers on the challenges of this Innovation, in order to preserve the integrity of the payment system", reads the message from Hyun Song Shin, economic adviser and head of the economic research of the BIS.
The Coronavirus pandemic have led to a significant increase in contactless payments and at the same time, deficiencies in the payment systems disclosed, in particular for the poor and for people without a Bank account, is a result of BIS investigation. According to their figures, 1.7 billion people and hundreds of millions of companies in the world are on cash as the only means of payment as instructed. In the United States, about 15 percent of black and Hispanic population have no access to banking services. A further cognition of the BIZ during the quarantine for precautionary reasons, higher Cash holdings, although less cash was paid. Because at the same time the contact took the Figures greatly.
Solid Central Bank Foundation is necessary
According to Shin, the private sector is well positioned to benefit from the ingenuity and creativity. However, he maintains a "solid Central Bank Foundation" for a necessary condition. A warning shot for the Central banks of the world were certainly the plans of the Internet giant Facebook, to develop a digital currency called "Libra". Unlike Bitcoin, the value of which are the basis of computer performance of the computers, to Libra is based on a basket of hard currencies and high quality government bonds. Therefore, Libra is also considered to be a so-called "stablecoin", which can be translated as "stable-coin", however, only inaccurate translation.
not now, the big question is how digital money to the Central Bank to obtain, so the BIZ is still in the Clear. In her article she acknowledges that the research is still at an early stage and further development will still require a certain amount of time. Digital Central Bank money is also referred to be very careful as "the limit of political possibilities". "Banks around the world deal Central intensive with a digital Central Bank money," said Benoît Cœuré, head of the Innovation Hub of the BIZ, and until the end of 2019, ECB Executive Board member.Updated Date: 25 June 2020, 06:19