Mark Cliffe, chief economist of ING bank believe that central banks around the globe would move towards creating their own digital currency. Cliffe was responding to a question on when would a central bank among G20 nations can launch a full-fledged digital currency.
2019 has been the year of crypto adoption despite the ups and downs of the trade market. Private technology giants like Facebook and Telegram have announced the launch of their digital tokens, while many others are pondering over the same. SoFi, a financing firm added crypto to its trading platform, Bakkt launched “physically” settled bitcoin futures contracts.
Many governments around the globe who were either skeptical over regulating cryptocurrencies or were watching from the sidelines have decided to regulate it. China has fast-tracked its stable coin launch after Libra’s announcement, France and Portugal have made crypto transactions tax-free while Russia has proposed to tax crypto under property tax code.
Banks must strategize their digital currency plans in the same timeline as private sectors
ING last week released a report in which it discussed the growing trend of private firms releasing their own stablecoin, especially focusing on the recent announcement of Libra. The report pointed out that central banks around the globe must start thinking more seriously towards adopting the modern fintech trend before the private sector captures the future financial market.
The report also hinted that Libra is putting pressure on these central banks to start mulling about the ongoing trend of crypto. However, the report also downplayed the argument of future being cashless.
Cliffe’s response came during an event organized joint event held by ING and the central bank thinktank, OMFIF. The meeting was to discuss,
“Rapid advances in distributed ledger technology have spurred debate about the possibilities, advantages, and drawbacks of central bank digital currencies. The principal limits and trade-offs seem to stem from CBDC’s economic, monetary and financial contexts, and depend on underlying policy and political preferences concerning privacy, data administration, market power, cybersecurity, and the division of labor between the public and private sector.”