IBM Report: 38% of Central Banks Are Actively Researching and Trialing Digital Fiat
The majority of global financial institutions surveyed believe that central banks should develop central bank-issued digital currencies (CBDCs), according to a report jointly released by IBM Blockchain World Wire and Official Monetary and Financial Institutions Forum (OMFIF).
The report surveyed 21 central banks around the world to determine sentiment towards digital versions of central bank fiat money as the issue of central bank digital currencies has been heatedly discussed over the last two years.
Even though 76 percent of respondents expressed their uncertainty about the effectiveness of technology (DLT), most of them believed central banks should issue their own CBDCs.
The finding echoes with the World Payment Report 2018 released a week ago, which concluded that distributed ledger technology (DLT) is not capable of meeting financial market demands at present, stating that DLT innovation and projects were often confined to research labs or to the proof-of-concept stage.
Even so, 38 percent of those surveyed from financial institutions are actively researching and trialling wholesale CBCDs, and 62 percent are reported as not currently active in this field.
While the 21 central banks are split over how governments should issue and manage digital fiat currencies, with no clear consensus arising as to how they should maintain control and access.
“And it may not be necessary to apply blockchain to these currencies, since central banks – as ledger keepers – are considered sufficiently trustworthy already,” reads the report. And this is exactly what China is considering.
Although the centralized country shows hostility to ICO and all those cryptocurrencies that are created by private firms, the has-been crypto mining power is working progressively on its own CBDC. While according to Xiao Feng, Chairman and CEO of Shanghai Wanxiang Blockchain Inc. and a heavyweight figure in China’s blockchain space, “A CBDC in essence is ‘digital currency’, rather than ‘fiat currency’. Our current fiat monetary system is good and there is no need to create another one. The urgent need now is to digitalize the financial system to promote the development of digital economy.”