While A Few Central Banks Call for Blockchain Tech for CBDC, Not All Believe DLT Is Fundamental
At a Kyiv, Ukraine, conference organized by the National Bank of Ukraine (NBU) that took place last week, central bankers from Ukraine, Netherlands and Canada agreed that blockchain is unnecessary for digital fiat.
The conference was centered around discussions about CBDCs, with the NBU being a pioneer ever since 2018 when it comes to exploring what running its own digital currency means. The banking community was questioned about the conclusions and ideas of the NBU, said Roman Hartinger, the head of innovative development department at the bank. NBU peers’ representatives from Japan, Belarus, Lithuania, Uruguay, Finland and South Africa were also present and involved in the talks.
The Idea of E-Hryvnia Explored by the NBU Since 2016
The discussions come while 2 of the world’s largest economies, China and the US, are seriously thinking about the possibility of a CBDC issuance, with China being already far ahead of the US. While Ukraine is waiting to pass on formal laws as far as regulating digital assets in the country goes, a report from September says the NBU was exploring the idea of issuing a digital currency ever since 2016. Back in 2018, it tested a copy of the Stellar blockchain, which was a fork-running token.
Netherlands and Canada, the Most Skeptical About Crypto
It seems skepticism on distributed ledgers was shared between Hartinger and representatives from Canada and Netherlands. Bank of Canada’s senior special director of fintech, Scott Hendry, said DLT isn’t necessary to create a CBDC. While the use of DLT wasn’t ruled out when it comes to digital currencies, none of the participants at the conference were too enthusiastic about it.
CBDCs to Be Created as a Response to Facebook’s Libra
Jamiel Sheikh, Chainhouse’s CEO says the creation of CBDCs is necessary in order to address Facebook’s Libra. While the Libra project was pushed back by governments from all over the world, it created a lot of fuss in financial circles. Here’s how Hartinger talked about it:
“Central banks see Big Tech issuing stablecoins, like Libra, they see this niche of digital money and now it’s the matter of who will have a money issuance prerogative, governments or the private tech companies?”