European bank officials discuss the potential benefits of central bank digital currency

European bank officials discuss the potential benefits of central bank digital currency

European Central Bank (ECB) officials highlighted the benefits of the central bank's digital currency (CBDC), while emphasizing caution in the speech made by the Bank for International Settlements on May 27.

Vitas Vasiliauskas – Chairman of the Board of the Bank of Lithuania and a member of the ECB Governing Council – delivered a speech on April 12th at the Breton Forest Commission meeting “Managing the Soft Leap of the Global Economy”. Vasiliauskas specifically considers whether CBDCs should be wholesale, retail or two. Both have both.

Vasiliauskas emphasized that CBDC should serve as a medium of exchange, means of payment and value storage, reflecting the quality of current central bank funds, rather than traditional reserve accounts or private crypto assets. If the retail CBDC is released, it will be open to the public, and the wholesale CBDC can only be opened to financial institutions.

Among the potential benefits of CBDC, Vasiliauskas will increase the efficiency of payment and securities settlement and reduce counterparty credit and liquidity risk. Interest-bearing retail CBDC is said to improve monetary policy transmission and strengthen policy delivery of deposit and lending rates. However, Vasiliauskas further warned:

“In some countries, the amount of cash in circulation is declining. This may mean that one day, even if it looks like a distant prospect – everyone must have a private entity account to pay. Unfortunately, this may lead to finance. The rejection rate is rising."

Vasivouskas said that retail CBDC will ensure that people continue to receive funds from the central bank, which may ultimately have a positive impact on financial stability. At the same time, a key issue that central banks should consider is CBDC's compliance with money laundering requirements and the application of anti-money laundering (AML) standards to anonymous forms of CBDC.

In early May, the European Central Bank issued a report on the possible impact of digital currency on economic development and monetary policy, which clearly stated that if cryptocurrency becomes a reliable substitute for cash and deposits, this effect may occur. They do not realize the function of money.

We will continue to update Blocking; if you have any questions or suggestions, please contact us!

Share:

Was this article helpful?

93 out of 132 found this helpful

Discover more

Blockchain

The macro economy basically faces the potential impact of bitcoin prices

Beginning in 2018, institutional funding began to enter the cryptocurrency field at an increasing rate, and Coinbase&...

Blockchain

Research Report | The main currency calculations have hit record highs, and the trading volume is expected to hit the peak again during the year.

First, weekly industry dynamics 1. At present, the total market value of the encrypted goods market is 285.251 billio...

Blockchain

Gold, BTC plunged, why did hedging tools fail?

Guide The new crown pneumonia swept the world, and the market's risk aversion increased, but the prices of gold ...

Market

Anthony Scaramucci Predicts Bitcoin Market Cap Soar to $15 Trillion Here's How!

SkyBridge Capital founder Anthony Scaramucci predicts that the Bitcoin market could reach a staggering $15 trillion, ...

Market

Bitcoin price forecast: BTC will reach 700,000 US dollars?

Recently, a large "bitcoin whale" was discovered in the cryptocurrency market. According to reports, Bitcoi...