Deutsche Bundesbank President Jens Weidmann discusses central bank digital currencies and claimed that they have the potential to destabilize the financial systems around the world so we read more about in our latest cryptocurrency news today.
Weidmann noted during a speech in Frankfurt, Germany, that the widespread use of central bank digital currencies will have ‘’serious consequences.’’
CBDCs are described as a more efficient and new way to offer the central banks another form of money. The potential use of the distributed ledger could bring the CBDC to operate without intermediaries and more accessible around the world. The Central bank governor of Lithuania Vasiliauskas described:
“Some argue it could be run on a distributed ledger. In such a case, it would replace or complement reserves at the central bank with a restricted-access digital token. A token would be a bearer asset, meaning that during the transaction the sender would transfer value to the receiver, without intermediaries. This is something fundamentally different from the current system in which the central bank debits and credits the accounts without transferring actual values.”
The arguments by Vasiliauskas provided during a speech at the Washington Conference have little meaning to Weidmann. He warned against the CBDCs, saying that the demand for them will be much bigger or more volatile than for cash and this will have corresponding effects on the balance sheet of the central bank.
The Deutsche Bundesbank president stated:
“I see ourselves [the Bundesbank] as having the duty to offer citizens modern, fast, and also internet-enabled means of payment. The idea is to develop solutions that are up to date with the latest technology without incurring unnecessary risks to financial stability.”
Also, as noted in the altcoin news, Weidmann shared his opinions on blockchain technology calling it extremely expensive and slow. He also said that the trial project of the bank to integrate blockchain failed miserably. During that time he noted that the blockchain solutions do not fare better in any possible pay. Reportedly, the process took a bit longer and the results brought up relatively high computational costs.
Weidmann also ridiculed blockchain saying that the technology is not a breakthrough and that he remains skeptical of the technology.
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“As for mutual settlements, we will consider, of course, a proposal on a cryptocurrency that is tied to gold. But, in my opinion, it is more important to develop settlements in national currencies.”Nabuilna explained that CBR is still unsure whether to use cryptocurrencies and how they could be launch into Russia’s monetary system but the idea of a zero-volatility digital asset is inviting:
“The CBR, in principle, is opposed to cryptocurrencies being launched into our monetary system. We do not see the possibility that cryptocurrencies fulfill the function of monetary surrogates. We have prepared an analytical report and will soon present it which will analyze what cryptocurrency is, what is happening in the world, what approaches different countries to have, and what regulation is envisaged. And, if the phenomenon of cryptocurrency in any perspective may cause risks to our macroeconomic stability, we need to understand that.”As noted in one of the best cryptocurrency sites, Russia is under significant economic sanction from the United States.
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