IBM: 61% of central banks believe blockchain is unnecessary

Most central banks see little benefit from blockchain during trials, it seems.

According to a new report from IBM and independent think tank OMFIF, 61 per cent of central banks do not yet believe that blockchain is necessary to improve efficiency. On the plus side, however, 38 per cent are currently testing central bank digital currencies.

Jesse Lund, vice president of IBM Blockchain, commented that “Bitcoin introduced blockchain and distributed ledger technology to financial services, and in the process did a wonderful and terrible thing. On the one hand, it demonstrated that information technology and social readiness for autonomous payment systems have matured to a tipping point.

“On the other, the social movement behind Bitcoin has perpetuated a mistaken idea that banks are no longer necessary actors for secure global money transfer. Similarly, central banks play an essential role in managing monetary policy, which should not be displaced by distributed autonomous organisations.”

The vast majority (76 per cent) of banks surveyed reported being unsure about the promise of distributed ledger technology, and many believe that the space will need to be regulated if it is to deliver.

“Despite – or perhaps because of – dispelling this threat to their authority, many of the world’s leading central banks have devoted considerable effort to examining the viability of introducing digital fiat currency as a complement or indeed a replacement for physical cash,” added Philip Middleton, deputy chairman of OMFIF.

“Most have concluded that, although such an introduction could deliver benefits in both payments system efficiency and the exercise of monetary policy reasons, now is not the time, for a variety of practical and policy reasons, to proceed with a retail central bank digital currency.”

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