{"id":282512,"date":"2021-02-02T11:23:17","date_gmt":"2021-02-02T16:23:17","guid":{"rendered":"https:\/\/insidebitcoins.com\/?p=282512"},"modified":"2021-02-02T11:23:17","modified_gmt":"2021-02-02T16:23:17","slug":"european-economists-trash-the-concept-of-national-digital-currencies","status":"publish","type":"post","link":"https:\/\/insidebitcoins.com\/news\/european-economists-trash-the-concept-of-national-digital-currencies","title":{"rendered":"European Economists Trash the Concept of National Digital Currencies"},"content":{"rendered":"
European economists Thomas Hass and Peter Bofinger suggest that the national digital currencies are not needed by economies. They noted that central bank currencies will not be able to compete with private banks.<\/p>\n
China is among the world\u2019s premier economies experimenting with digital currencies, which will provide digital versions of their national currencies. The European Central Bank is also mulling the possibility of a digital euro. Central banks of other countries are also actively researching the use of digital currencies in their payments ecosystem.<\/p>\n
<\/a><\/p>\n The researchers argue in their paper that the race to creating a substitute for digital cash risks failure and lacks an \u201cobvious justification.\u201d Both Hass and Bofinger published their paper with European policy analysis publication VoxEU and said that the central banks have been focusing on CBDCs as a medium of exchange. The duo is associated with the Economics department at the University of Wuerzburg in Germany.<\/p>\n The duo suggests that private banks are already offering benefits like deposit insurance with a wide variety of products. In such a case, it doesn\u2019t make much sense for CBDCs to exist as a medium of exchange. The researchers write, \u201cThey have to show that the objectives which they pursue with CBDCs are currently not satisfactorily met by the private providers. And even if public goods like financial stability or stability of the payment system are not optimally met, it is not obvious that CBDC is the adequate solution.\u201d<\/p>\n However, they said that CBDCs could work as a supranational store of value in the international system.<\/p>\n A CBDC is a deposit with the central bank of a country that can be used within the existing RTGS payments framework. It can also be defined as an independent and parallel system related to deposits with central banks. The duo writes that it would be difficult for central banks to launch a CBDC without interfering with the existing market.<\/p>\n","protected":false},"excerpt":{"rendered":"No competition with private banks<\/h2>\n