Central banks saw a threat to commercial banks in digital currencies supported by the state. Reports with a description of the potential hazards of such a national currency published the Federal Reserve System of the United States (Fed), the Bank of England, the European Central Bank (ECB) and the Swiss National Bank, writes Bloomberg. At the same time, each of them, except for the Fed, has its own project to develop a digital currency of the Central Bank (CBDC), although the American regulator considers such an opportunity.
According to the reports published by the Bank of International Claims (BMR), during the CBDC crisis “can be perceived as a safe harbor.” The Central Bank scares that in case of economic shocks, citizens will start buying a national digital currency instead of keeping money in commercial banks, counting tokens more reliable investment. Deposits of global banking giants may decrease, which will jeopardize entire financing of the industry. According to one of the reports supported by the state, digital currencies “can lead to higher volatility of deposits and / or significant long-term reduction in customer deposits.” “This may, under certain circumstances, influence the profitability of the bank, lending and the general provision of financial services,” say representatives of the BMR.
Central Banks consider the prospect of introducing its own digital tokens against the background of high volatility of commercial cryptocurrency. Governments are attracted to carry out instant international transactions with a low commission and minimal regulatory restrictions or without them. However, the reports are invited to establish strict rules governing transfers or storage CBDC. So governments expect to minimize risks for the commercial financial sector and provide for the transitional period before the introduction of a digital currency. Central Banks also consider the introduction of price control mechanisms.
China is already actively introducing a digital yuan, which forced many countries to think about creating such a national currency. Recently, the US Federal Reserve has announced that a study prepared for publication dedicated to the potential adoption of the digital dollar. “The main criterion for evaluating the digital currency of the Central Bank and other digital innovations will be the answer to the question – are there explicit and tangible advantages that outweigh any costs and risks?” – Commented on the project Chairman of the Fed Jerome Powell. EU, England and Switzerland have long announced the development of their own CBDC.