- ConsenSys has published a new whitepaper that proposes a central bank digital currency that based on the Ethereum blockchain.
- Joseph Lubin bring to attention that the research shows that 70% of all central banks are interested in issuing their digital coin on the blockchain.
The authors of the paper initially discuss the success of stablecoins that privately distributed and backed by a stable asset and the fact that this market now holds a capitalization of $5 billion.
In the foreword, ConsenSys founder and Ethereum Co-Founder, Joseph Lubin bring to attention that the research shows that 70% of all central banks are interested in issuing their digital coin on the blockchain.
And doing so can prove to be very beneficial to the everyday consumer, resulting in an advancement of the digital assets, in a more regulated, low-risk and accessible environment.
This would also be the right way for banks to keep up the technological advancements in fintech as well as implementing new monetary policies.
He then goes on to state that given the needs of a digital currency for central banks, the best blockchain to base this off of is that of Ethereum’s. Ethereum offers a “maximally secure, global-scale, interoperable settlement platform that CBDCs require.”
As the paper goes on to discuss, a central bank digital currency would help foster digital assets and push its development forward. Help develop future-proof monetary policies and regulatory practices, cheaper cross-border remittances, more efficient bank-to-bank payments, and innovation in the retail markets.
But to develop a proper CBDC, central banks will also have to discuss who gets access to the CBDC, how the currencies will circulate, governance and administration over the money.
The proper concoction of privacy and transparency, flexible and robust performance while being legally compliant to all the financial regulations and laws.
In a challenging and growing world where financial technologies are taking leaps and bounds forward using blockchain technology and cryptocurrencies, central banks are going to have to join in on the bandwagon and grow themselves into this new digital economy.
The whitepaper published by ConsenSys provides a strong argument. Why this is necessary and a solid base on how to implement such a CBDC.