Many central bankers rejected the need for CBDCs at the National Bank of Ukraine conference clarifying that blockchain technology is offering almost no benefits over other digital technologies.
Canada Central Bank Found No Benefit Of Using Dlt In CBDC
Just a few days after Sweden’s central bank launched its Digital Currency, E-Korona, representatives of various central banks banished the benefit using blockchain technology in centralized digital currencies.
After testing the blockchain-based digital currency for a few months, Ukraine central banks found no significant advantages in using Distributed ledger technology specifically for developing centrally-issued digital currencies.
The representative of the Canadian central bank rejected the value of a CBDC despite Bank of Canada’s earlier explorations that say the same could stimulate a more competitive banking sector eventually benefitting the economy.
Even if the usage is low, CBDC can increase lending and aggregate output further improving the efficiency of bank intermediation, wrote the central bank.
In early 2016, Canada’s central bank initiated Project Jasper to learn how DLT can influence payment infrastructure. Other financial institutions, as well as Payments Canada, carried out the project.
One of the representatives at Bank of Canada, Scott Hendry said in the conference that there is no need for DLT in central bank digital currency.
Central Banks Legislators Questioning The Value Of CBDC
Many other economists and representatives questioned the value of the blockchain-based currency including the Dutch central bank policy advisor who said that what is the logic of a single party issuing a blockchain-based currency. He said that keeping in mind the nature of DLT infrastructure of not trusted single party there’s no point of central banks issuing it.
These doubts rose after months when the Bank of International Settlements and IMF urged policymakers globally for further exploring blockchain-based virtual currencies.
Previously, J. Christopher, the former Chairman at CFTC, co-created the Digital Dollar Project (a non-profit organization. This project aims to advocate the investigation of CBDC in the US.