On March 7, three currency and cryptocurrency experts discussed the challenges and prospects faced by the central bank in issuing digital currency at the MIT bitcoin 2020 Expo. Panellists acknowledged that blockchain technology could improve the existing global monetary system. However, they believed that there were still major challenges in the privacy, interoperability and scalability of blockchain.

IMF official: central banks should not rush to adopt blockchain

Sonia, an economist at the International Monetary Fund (IMF). Sonja davidovic warned central banks not to rush to implement the blockchain system without first properly reviewing the technology.

She said:

“What we see is that there is a phenomenon of hype. People will soon turn to technology because of its popularity.”

“Blockchain is indeed. As a result, we see central banks directly involved without the appropriate process of testing technology to verify the concept, selecting suppliers through an open bidding process and public consultation.”

Although the central bank can use a series of distributed systems, Davidovich said that no system shows strong privacy and interoperability. The IMF official added that central banks face amplified risks in 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 someone in the operating system clicks on a phishing email or a security vulnerability that can be exploited illegally, your most powerful system will not help security.”

Can the blockchain system support trillions of transactions?

Robert Lai, a scientist at MIT digital currency initiative and a former Bank of England official. Robleh Ali predicted that the central bank’s digital currency will eventually take on a variety of different “mixed” forms.

“You may end up with a mixed solution. I don’t think every central bank will choose the same system. How they interact will be the key, so you can classify them as a single system.”

Bob, head of applied financial technology research at the Federal Reserve Bank in Boston. Bob bench asserted that cryptocurrencies such as bitcoin could not be adjusted proportionally to meet the needs of the central bank.

“BTC is very interesting because it is mainly transaction value. However, if you try to create a central bank currency for retail use, such as China, which created 40 trillion transaction volume through wechat alone last year, you need a currency that can transfer value again and again and can be realized quickly without collapsing.”

While acknowledging the possible role of the blockchain, the Fed official urged central banks to consider incorporating “full faith and trust in government currencies” into the risk considerations of the blockchain.

Alipay wechat becomes a part of digital central bank reserve

Becky added that with the people’s Bank of China starting to provide direct financial support for the two platforms from June 2019, Alipay and wechat have become the reserves of the global digital central bank.

Editor in charge: CT

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