Ripple CEO Asks IMF Deputy: Don’t Central Banks Already Issue Digital Assets-Versions of Their Fiat?

CEO Ripple, Brad Garlinghouse stood beside IMF Deputy General Counsel, Ross Leckow in a presentation on their opinions on digital currencies during the Singapore Fintech Festival.

The pair were asked questions on their views about the current digital asset market and the role of central banks by the audience.

Conservative Counsel

As a high ranking official of the International Monetary Fund, the questions directed towards Mr. Leckow were answered with very straightforward and conservative replies. The first question directed at him concerned the international organization having any digital assets such as cryptocurrencies.

For that to happen,” Mr. Leckow clarified, “…some country would have to use a crypto asset as its currency”.

This clearly reflects the position of IMF, which is an organization that caters for central banks and therefore, holding a crypto or a digital asset would be of no use to it.

After his reply, another member of the audience asked his views on the possibility of a central bank issuing a central currency in future. He pointed out that many countries across the world are seriously looking into the possibility and use of a centrally backed digital currency.

However, he mentioned that most of the research by the banks had shown that there was no greater benefit of nation level cryptocurrencies over the traditional technology they used. According to Ross Leckow, there might be benefits in the future and with many banks having an on going study and trials, this might change.

Project Jasper was one which he specifically mentioned in his reply. According to Leckow, the Bank of Canada experiment in digital assets, although a success in terms of finalizing settlements, had little to show in the way of any progress in currency matters. He ended his bleak view of cryptocurrencies with a ray of hope,

…but when combined with other things like the security settlement system, use-cases begin to emerge so let’s keep an open mind

Number on A Screen

Garlinghouse, CEO of Ripple, held a very different opinion from Leckow. He was quite forward with what he believed was currently a digital version of fiat. He asked in return,

It strikes me that… Don’t central banks already issue digital assets-versions of their fiat? What I mean by that is when I log in to my bank account, I see a number representing my deposits and it’s a digital representation, they don’t actually have the dollars behind that for everything we have.”

He predicted that central banks would issue digital assets in the coming years.

He further went on to defend his view by explaining through and example of how each Singapore Dollar had a unique serial number and somewhere, it could be compared to a digital version of itself. He opined that this was no different from a digital asset.

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