Bitcoin and other digital currencies are becoming more popular by the day. However, the European Central bank and its Chief Mario Draghi has taken a negative stance against this trend, but not all ECB officials agree. In this article, we examine the viewpoints of those ECB officials as they explore Central Bank Digital Currencies Potential.
18 March, AtoZForex – The current noise about cryptocurrencies is turning up, yet can it yield a massive change in the universal financial system? Changing from dealing in banknotes as physical money to using cryptocurrency, which is a virtual means, one can say, even if it digitally exists. Yet, fears and uncertainty sounds are to be weighed on the scale of this question.
Yet, the leading financial institutions around the world do not seem to have fully studied the pros and cons of the suggested change, and most importantly, any potential risk in dealing in the new currency.
Physical Money VS. Cryptocurrency: Questions To Ask
A modest attempt to replace the physical currency with Bitcoin- which prominent financial analysts see as “the most secure financial network on the planet” was not successful before today, and only very few used it for payments, so what can be new and “tempting” for pushing toward cryptocurrency to take over as a new radical change in the world of money?
Ordinary consumer, especially one who is not financially acquainted enough, raises serious questions about first and foremost, the security of the new suggested financial method.
Since digital banking system have not yet been fully certified to be entirely safe and risk-free, and while history did witness big shocks in hacking incidents to individual and even big corporations banks accounts, then what would encourage the targeted community class –who should be focused on in that before investors themselves- to accept dealing in cryptocurrency over the current cash system they got used to at least, and rather learned their lessons well in how to use it, and make them willing to go through the change process? Especially with the recent report that revealed the stealth of 526 million units of NEM, the Japanese cryptocurrency exchange Coincheck declared.
ECB officials explore Central Bank Digital Currencies Potential
The new controversial financial system has yet brought to the surface many conflicting opinions and reads, coming from international financial bodies and members of their boards inside. Benoit Coeure, Member of the Executive Board of the European Central Bank (ECB), holds an opposing stance from the one his bank has and sees that today’s cryptocurrency is a promising start to change the current financial system in the future. The thing that agreed with Jacqueline Loh, Chair of the Bank for International Settlements (BIS).
In the same context, Bank Of America has fears about the currently-discussed payment method change. The 2018 G20 summit being held in Buenos Aires –which France’s finance minister requested a debate about regulating using Bitcoins during it- will bring to public soon clearer information about cryptocurrency, and whether it is going to really replace the banknote system, which is not some 1200 years since it was first used in China or not.
The thing, that if was agreed on, will need for sure, if not a radical change in the overall global financial regulations risk scores studies, then at least a long and deep revision of them to check if they fit with tomorrows use of payment methods or not.
About the Author
This article was provided by Redwan Eid, a Syrian journalist, and translator. Redwan worked for the print, electronic, and broadcast media.