Digital Currencies Receive Interest from Key Central Banks but What will They Look Like?
By Max Steadman – Cryptocurrency Enthusiast
Cryptocurrency trading has piqued the interest of many retail consumers – now its time for Central Banks to take the stage.
Facebook’s announcement regarding the release of their own cryptocurrency has prompted central banks to consider doing the same. Referred to as Central Bank Digital Currencies (CBDC’s), the Bank for International Settlements, along with seven other traditional platforms, including the Federal Reserve, European Central Bank and the Bank of England published a report outlining key details and a framework for implementing such a product.
One of the main sentiments to take away is that this initiative is to compliment traditional payment methods, but not to replace them. Central banks are seeking to support digital markets and their users who buy Bitcoin rather than harming them or adding further complexity. The aim would be to enhance the experience for those who buy and sell Bitcoin rather than hinder it.
This is not the only current report on CBDCs, as numerous institutions around the world are conducting similar projects. With Bitcoin investing and wallets like WeChat and Alipay already receiving adoption in China, their central bank is launching partnerships to trial their own digital currency. Similarly, Sweden is working with the financial firm Accenture to release their planned ‘E-Krona’ virtual currency.
The above remains within its experimentation phases as central banks are not yet ready to decide if digital currencies should be issued. For now, these projects are being researched to see if at all this is plausible. Central banks responded to Facebook’s plan to build a digital currency last year. This however, faced legislative backlash and resulted in some of the high-profile investors dropping out of the scheme.