On March 7, three currency and cryptocurrency experts discussed the challenges and prospects of central bank issuing digital currency at the MIT bitcoin 2020 Expo. Members of the group acknowledged that blockchain technology could improve the existing global monetary system, however, they believed that there were still significant challenges in the privacy, interoperability and scalability of the blockchain.
IMF official: central banks should not rush to adopt blockchain
Sonia, economist at the International Monetary Fund. Sonja davidovic warned central banks not to rush to implement blockchain systems without first properly reviewing the technology.
“What we’re seeing is that there’s a hype, and people will soon turn to technology because it’s popular.”
“Blockchain does. As a result, we see central banks directly involved, without the proper process of testing technology to validate the concept, selecting suppliers through an open tender process, and public consultation. “
While central banks can use a range of distributed systems, Mr Davidovich said none showed strong privacy and interoperability. The IMF official added that central banks face the risk of amplification when implementing these technologies because they usually outsource development to third-party companies.
“This is the weakest link. You can have a secure system, but if the person in the operating system clicks on a phishing email or a security vulnerability that can be exploited illegally, then your most powerful system will not help security. “
Can blockchain systems support trillions of transactions?
Robert Lai, a scientist at MIT digital currency initiative and a former Bank of England official. Robleh Ali predicts that the central bank’s digital currency will eventually take on a variety of different “hybrid” forms.
“You may end up with a hybrid solution. I don’t think every central bank will choose the same system. How they interact will be key, so you can categorize them into a single system. “
Bob, head of applied financial technology research at the Federal Reserve Bank in Boston. Bob bench asserts that cryptocurrencies such as bitcoin cannot be scaled up to meet central bank demand.
“BTC is very interesting because it is mainly about transaction value. But if you’re trying to create a central bank currency for retail use, such as China, which generated 40 trillion transactions through wechat alone last year, you need a currency that can transfer value over and over again and quickly, without collapsing. “
While acknowledging the potential role of the blockchain, the Fed official urged central banks to consider incorporating “full faith and trust in government money” into the risk considerations of the blockchain.
Alipay WeChat has become an integral part of the digital central bank’s reserves.
Beche added that with the Chinese people’s Bank of China providing direct financial support to the two platforms since June 2019, Alipay and WeChat have become the reserves of the global digital central bank.
Editor in charge: CT