The Central Bank of the Netherlands (DNB) has announced its readiness to develop a state cryptocurrency to diversify the payment market.
According to a report published by the Central Bank of the Netherlands, the use of cash in the country is starting to decrease, so it makes sense to consider in more detail the creation of the Central Bank’s cryptocurrency, which can play an important role in the development of the financial industry, as well as give citizens of the country some advantages. The Bank of the Netherlands expressed optimism about the state cryptocurrency and expressed its willingness to take an active part in its development, as the payment sphere is “rapidly transitioning to digital format”.
The bank’s management explains that despite the economic crisis, people have become less dependent on cash, and the stability of the central banks will help the “survival” of fiat currencies in the digitized world. To avoid the risks associated with ordinary crypto assets, firms and individuals will be able to convert their funds held in commercial banks into government cryptocurrencies. Therefore, the bank stated its readiness to play a leading role in the study of such stable cryptocurrencies, providing a “testing ground” and continuing discussions on how they can be implemented in the EU.
The Bank of the Netherlands also expressed its opinion on Libra. The bank believes that despite the “restructuring” of the project and its desire to meet international regulatory requirements, it continues to pose a threat to the global financial system.
Besides, the bank differentiated between smart contracts and distributed ledger technology (DLT), considering that DLT is used by “idealists” who do not work in the banking system. According to specialists from the Bank of the Netherlands, decentralized solutions require large resources, and the distributed consensus model is impractical, so “the bank is not ready to make such sacrifices” in the implementation of the state stablecoin. At the same time, the bank believes that state cryptocurrencies should have a certain share of confidentiality.
Back in May last year, the Central Bank of the Netherlands noted the need to study and implement the blockchain, although previously it considered this technology to be not effective enough for payment systems.
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