How your Central Banks is thinking about CBDC (Central Bank Digital Currencies) ?
All central banks are just “experimenting” however very few of them are recognizing the infrastructure flippening, from cryptocurrencies running on top of FIAT money systems to FIAT money systems running on top of cryptocurrency systems.
Central Banks are exploring different journeys on how the flippening will happen and the path to follow.
The Central Bank journeys I identified so far are:
- Just keep trying to maintain the status quo by using technology in their favor.
- Regulates Private Organizations (including Digital Giants) to issue stablecoins (Digital Tokens) on top of decentralized distributed ledgers.
- Enabling a cash less society by enabling a Digital money services like a CBDCoin.
- Issuing a CBDCurrency on top of decentralized ledgers. Or embrace cryptocurrencies ( This is what El Salvador did by declaring Bitcoin as legal tender in their economy)
IMHO Stablecoins is the least disruptive path for Central Banks for a transition to a CBDCurrency. And eventually to even accept cryptocurrencies as legal tender. This way Central Banks would be able to gradually shift from privately leverage stable coins toward exclusively centralized minted currencies on top of public blockchains.
Then will be a matter for each society to keep endorsing their government (central bank) to play the “stability role”. The least the stability role is fulfilled the higher is the possibility to achieve the crypo utopian dream of a kind of a Bitcoinized economy.
Hence what’s Central Banks should care about? They should focus on fast evolving the monetary policies by bringing more transparency on how they determine the perceived value of their currency. How they could do that? By enabling self-enforcing rules with KPI directly related to their social development (Utility services consumptions such as Water, Electricity, Gas, Telecommunication could be an starting point)
What do you think? What will be the future role of Central banks, if any at all?