IBM Inquiry: Central Banks to Support Digital Currency as DLT Technology Improves

The results of an IBM survey indicate that most central banks believe that they should launch their own digital currency (CBDC). However, they are not convinced that the blockchain offers advantages in terms of cost and efficiency.

The report with the results of the survey was released Friday. The survey was conducted jointly by IBM and the Forum of Formal Monetary and Financial Institutions (OMFIF). Twenty-one central banks were surveyed between July and September on distributed ledger (DLT) technology and digital currencies.

Of the 21 participants, 38% are willing to test their own CBDC, which can be sent between banks. Thus, although much of the field is not yet active in the field, the report states that "most respondents believe that a CBDC should be put into circulation by a central bank".

In addition, the creation of a digital currency of a value similar to that of a traditional currency would limit the credit risk and guarantee "the stability of the value of the token".

Nevertheless, participants shared their concerns about the Blockchain. Distributed ledger technology is often presented as a wonder that can both increase the efficiency of international transactions and minimize costs.

"61% of central banks say that blockchain is not necessary because they have made little progress in terms of efficiency during testing, because the technology is still in its infancy," the report says.

In addition, 76% of the banks questioned do not know if "the DLT will be able to keep its promises, especially in the areas of regulation". The authors of the report conclude:

"Central banks argue that blockchain systems need to be improved before they can solve problems such as speed and scalability."

Image via Unsplash

Corinna is the editor-in-chief of Coinwelt. Since 2016, his world is based around crypto-currencies and blockchain. Not a single day goes by without Corinna being bored for not investing in Bitcoin from day one. She finds the international legal situation particularly interesting for currencies such as Bitcoin. For the future, she hopes for a positive attitude from lawmakers and clear laws on the treatment of digital parts.