World Bank President: Blockchain Technology Has “Huge Potential”

Jim Yong Kim, the president of the World Bank, has recently stated he believes blockchain technology has “huge potential,” and that embracing the technology is essential for the organization’s goals.

His words came during the International Monetary Fund (IMF) and the World Banks’ Annual Meetings in Bali, and were filmed by CNBC. They came as he mentioned the World Bank’s mission is to end poverty and boost prosperity.

Kim noted there are innovations in the world that can “help us leapfrog generations of bad practice,” and that it could take “forever in terms of reducing corruption.” He added:

We talked about cryptocurrencies but we think distributed ledger [technology] has huge potential and we issued the first blockchain bond in August, where we created, allocated, transferred and managed the entire bond through blockchain technology.

Adding to this, Kim said using blockchain technology not only helped reduce the amount of paperwork the World Bank had to deal with after launching the world’s first blockchain bond, but also helped it reduce costs.

Distributed ledger technology, he added, can be extremely helpful in the future. In his words, the World Bank Group hasn’t been keeping up with the latest developments and is not “doing it in a way that would help our clients take advantages of the great things that are coming out.”

Kim added that universal access to financial services by 2020 is one of the World Bank’s goals, after restating the organization thinks there’s “huge potential” in this type of technology and, presumably, fintech in general.

Things in the tech space, he said, are moving incredibly quickly. Since the organization deals with countries that don’t have tech centers like Silicon Valley, he noted it’s “absolutely” the organization’s responsibility to keep up with these new technologies.

As CryptoGlobe reported various organizations have been looking into the crypto and fintech space and its potential impact on the global financial scene. The Financial Stability Board (FSB), an “international body that monitors and makes recommendations about the global financial system,” published a report arguing the growing popularity of cryptoasset could affect financial stability.

In its World Economic Outlook: Challenges to Steady Growth report, the International Monetary Fund (IMF) mentioned that cryptoassets could create “new vulnerabilities” in the global financial system.

Weekly Newsletter

Bank-Backed Cryptocurrencies Are a Decade Away, Says Central Banker

Will Heasman

Former vice president of the European Central Bank (ECB), Christian Noyer, has affirmed that central bank digital currencies (CBDCs) are unlikely to be rolled out for another decade. 

Jumping off the recent uptick in digital asset interest from central banks, as well as Facebook's rocky foray into the industry, Noyer opined that CBDCs are a future potentiality. However, speaking to the Financial Times, the former banker caveated that "hesitations" around CBDCs—arising from privacy concerns and control of fiscal policy—may hinder their launch.

Whether they will enact the projects in the next ten years remains to be seen. I don't think we are close to the departure lounge, but the fact that they want to study it means a lot of work will continue this year.

CBDC Madness

Bank-backed crypto projects seem to be more prevalent than ever. China's implementation of a sovereign cryptocurrency is apparently on track for imminent release—despite multiple flunked deadlines. In fact, it's thought that China's attempt at a CBDC has spurred multiple knee-jerk reactions from other national institutions.    

This appears to be the case for one of the latest—and perhaps most intriguing—CDBC investigations.

Back in January, a central bank collective, comprising of six of the world's top institutions, announced plans to study the benefits of a CBDC.  The collective which incorporates the European Central Bank; the Bank of England; the Bank of Canada; the Bank of Japan; the Sveriges Riksbank; and the Swiss National Bank, and the Bank for International Settlements (BIS) aims to assess several criteria, including:

CBDC use cases; economic, functional and technical design choices, including cross-border interoperability; and the sharing of knowledge on emerging technologies.

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