IBM, a big tech company and one of the earlier investors in blockchain technology, claims that big central banks will start issuing their own cryptocurrencies relatively soon.
This news comes to us via a report put together by not only IBM but the Official Monetary and Financial Institutions Forum (OMFIF) as well. They note that within the next five years, this study concludes that a “consumer-ready CBDC” or central bank digital currency will arrive. Of course, these assets are already in development or at least under serious consideration via multiple central banks around the world.
These statistics and more came from a survey of around 23 central banks participating in all sorts of different economies regarding the advancement of technology. On top of this, the report notes that many of these initial currencies will be used in a “small economy” and apply to very specific use cases.
Consumer-focused cryptocurrencies
“A consumer-ready CBDC is likely to require some form of public-private partnership. Central banks are hampered in their ability to offer financial services, and private companies will probably fill the gap,” reads the report.
Overall, the report’s key findings are as follows:
- In dealing with digital currencies, policy objectives will remain central bankers’ pre-eminent concern; advances in technology alone will not determine how CBDCs are designed or whether they will be introduced.
- 73% of central bank survey respondents would require retail CBDCs to be available under all circumstances and for all types of payments where cash is currently used.
- More than half of respondents said they were very concerned about the possibility that private challengers like Libra would critically undermine monetary sovereignty.
- 82% of those responding said their greatest financial stability concern from CBDC implementation was the risk of digital bank ‘runs’ which could damage stability and confidence.
- 64% of respondents said outsourceable ‘intermediation’ functions, such as customer onboarding, would be important for CBDC implementation.
The survey went from July of this year to September.
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