Central Bank Issuing Digital Currency?

In cooperation with the IMF, we announced plans to issue cryptographic currency.

It will be the future of the globally recognized cryptographic currency.

As the cryptocurrency market expands, the financial industry has become more focused on taking new steps to address them.

Recently, the movement to clarify restrictions related to cryptocurrencies has been particularly noticeable, but the report recently published by the International Monetary Fund (IMF) makes the movement of central banks to issue digital currency realistic. It clearly states that it is coming.

In this report, which reports the results of a survey of central banks, the Ministry of Finance, and other government agencies in 189 countries around the world, this report reports competition with cryptocurrencies as the main reason for central banks to consider the issue of cryptocurrencies.

The survey reveals a wide range of views on central bank digital currencies worldwide.

About 20% of the respondents said they were looking for the possibility of issuing such a currency.

However, those efforts are still at an early stage, and only four test programs have been reported.

The main reasons for supporting the issuance of digital currency are cost reduction, improvement in efficiency of monetary policy, response to competition with cryptocurrency, securing of competitiveness in the settlement market, and provision of risk-free payment means.

The IMF has cited in its 2018 International Financial Stability Report that crypto assets have the potential to improve market efficiency as a feature of crypto assets, but at the same time, as a potential risk of virtual currency,

・ Security breach

·scam

・ Operational failure

・ Use in cheating

Although the cryptocurrency does not appear to pose a financial stability risk at this moment, it is explained that there is a possibility that it will be a risk if the cryptocurrency becomes widespread without appropriate measures being taken.

The technology behind cryptographic assets has the potential to make financial market infrastructure more efficient.

Cryptographic assets, however, suffer from fraud, security breaches and operational failures and are associated with fraud.

Cryptographic assets do not appear to pose a financial stability risk at this time, but if their use expands further without appropriate safeguards being taken, they can pose a risk.

In the virtual currency market in 2018, the market continued to fall and there was no significant market growth.

Recently, however, the fact that the virtual currency market may expand further due to the fact that Facebook announced the virtual currency Libra, etc. indicated that “financial stability risk” stated in the report Is considered to be rising.

Although the IMF believes that crypto assets may improve the global financial system, it also believes that central banks need to take appropriate safeguards to maintain financial stability. Digital currency issuance is expected to be such a countermeasure.

The Central Bank Digital Currency is designed to give the central authority full control over the currency system, so it differs fundamentally from distributed cryptocurrencies such as Bitcoin where there is no central administrator.

The benefit of such a distributed cryptocurrency is that all people participating in the network can freely trade directly without being centrally managed, so only to some organizations As long as there are a certain number of people who do not want to be managed by, Bitcoin is expected to continue to hold demand.

Given these characteristics, central bank digital currency is likely to be at least not a threat of distributed cryptographic currency.

However, considering that the IMF now says that digital money supported by the central bank may become a reality, government agencies are gradually starting to regard cryptocurrencies as “potential competitors”. It is expected that there will be

Certainly, the influence of cryptocurrencies is gradually growing, and so many countries and central banks are still discussing these contents.

Recently, it has also been decided to establish an international regulatory body for cryptocurrency service providers, but such an approach indicates that cryptocurrency is being recognized as a new asset class internationally.

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