Dutch banking giant ING says that central bank-issued digital currencies are inevitable, extending beyond China’s digital currency rumored to be released later this year.
According to an article published on THINK, ING financial experts have said that a “fully-fledged central bank digital currency is coming. The bank’s chief economist Mark Cliffe and lead economist for digital finance Teunis Brosens gave the prediction that we “might well see a central bank digital currency emerge within the next five years.”
Brosens says the main benefits will be in the wholesale market,
The main advantages are first within the wholesale arena of financial markets. We see that the existing financial infrastructure is outdated. It’s expensive, it takes a lot of time, compliance is difficult.
In addition to added security measures, Cliffe added that banks will find it advantageous to “get rid of hard cash and notes,” by opting for a digital equivalency. Central banks will also need to find ways to remain up to date in the field of financial technology, particularly with the rise of company-backed digital currencies, such as Facebook’s libra.
International Monetary Fund economist Priscilla Toffano was less certain on central banks launching digital currencies within the next five years. However, Toffano highlighted the value of digital currencies in reducing costs and improving financial inclusion.
Either prediction of central banks issuing digital fiat being years away may prove conservative in retrospect. While the People’s Bank of China has denied reports of a digital currency launching before the end of the year, other insiders have said it could happen as early as November 2019.
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