(BlockBar) Bank of International Settlements officials said recently that the global central bank may have to issue its own digital currency earlier than expected, and it also supports central banks around the world to create a digital version of national currency.
Under the background of the changing times and the progress of science and technology, digitalization has changed the way people communicate, organize, interact, migrate and trade in many fields. With the rapid arrival of cash-free and digital society, there are signs that the central bank digital currency (CBDC) is becoming a new field of intentional research and development by central banks around the world.
On July 9, the Turkish government added the relevant content of the central bank’s issuance of digital currency to its Economic Roadmap for the period from 2019 to 2023. The 11th development plan proposed by the President of Turkey shows that “digital central bank currency based on block chain will be implemented”. In addition to the central bank’s digital currency, the development plan also lists the block chains to be used in transport and customs operations. It is reported that Turkish Vice President Oktay submitted the plan to Parliament and the Budget Committee.
The plan points out that public services and management can be improved through emerging technologies such as big data, artificial intelligence and block chains. In fact, Turkey has been considering issuing a state-encrypted currency for some time. In February 2018, the economist and then Vice Premier, Mehmet Simsek, said in an interview with the media: “We plan to start our digital money work. We attach great importance to digitalization.” Global consumer survey in 2019 published by statistics company shows that about 20% of Turkey’s residents are investors in encrypted currencies. Per capita encrypted currency ownership rate in Turkey is the highest among all countries surveyed.
Similarly, the governor of the Russian Central Bank, Elvira Nabiullina, said in June that the Russian Central Bank would one day introduce its own digital currency. In her view, the key to CBDC effectiveness is that technology must ensure “reliability and continuity” and the technology must be mature. She had previously stated that the Russian Central Bank would consider using an encrypted currency backed by gold to facilitate international settlement.
In a report on June 27, the International Monetary Fund predicted that central banks would begin issuing digital currencies in the near future. According to the report, the IMF and the World Bank conducted a survey of financial technology to seek answers from financial institutions. Based on the 96 responses received, they got the prediction. Overall, central banks have different motivations for developing CBDC — although both emerging and developed economies are considering CBDC schemes, as the frequency of cash use declines, the latter needs to provide alternatives rather than cash; for emerging economies in developing countries, the main role of CBDC is to reduce costs and provide better financial services.
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