As a seasoned crypto investor with a keen interest in central banking and financial technologies, I find Joachim Nagel’s remarks at the Innovation Summit particularly intriguing. His admission of uncertainty regarding the future of central banks is a refreshing perspective that resonates with my own observations of the rapidly evolving landscape.
According to Joachim Nagel, president of the Bundesbank and an ECB member, the future role of central banks hinges on updating their business models and promptly integrating central bank digital currencies (CBDCs) into their operations.
At the Innovation Summit organized by the Bank for International Settlements on May 6, Nagel allegedly expressed concerns over the ambiguity regarding the role of central banks during a panel discussion.
“Twenty years ago, if someone had asked me if the central banking model could be put at risk, I would have confidently answered with a no,” Nagel supposedly remarked in Basel, Switzerland.
“Now I am not so sure anymore — and that is the reason why we are sitting here. We need to work on our business model. And DLT is just a means, an instrument that could help us here to get to that point.”
The head of the Bundesbank underlined the significance of adopting distributed ledger technology as the use of physical money wanes. “We must accelerate our efforts in this regard […]. If a significant component of your offering is becoming less desirable, it’s crucial to consider introducing a fresh, compelling alternative,” Nagel emphasized.
At the recent BIS conference, French Central Bank member Francois Villeroy de Galhau advocated for central banks to explore the use of digital currencies. Specifically, he proposed that these currencies could be employed for both large-scale business and consumer transactions.
“The way we make central bank money available has to be geared to the 21st century to ensure that central bank money maintains its fundamental role: this role is not to be the dominant means of payment, but a stability anchor for the financial system. This is why I believe that, sooner or later, we will need a central bank digital currency for wholesale as well as for retail purposes.”
As a analyst, I can tell you that the European Central Bank (ECB) has progressed from the investigation stage to the development phase of creating a digital euro. We have thoroughly examined its design and technical specifications during this period. The ECB aims to finalize this project by October 2025.
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2024-05-07 00:31