News

IBM-OMFIF Survey; Central Banks Interested in Cryptocurrency for Interbank Fund Transfer

A recent IBM-OMFIF survey aimed at studying how future financial infrastructure would look has revealed that global central banks have expressed interest in the virtual currencies to facilitate interbank funds transfers despite the indifference about bitcoin (BTC) as well as other crypto tokens.

IBM-OMFIF Survey

The survey also revealed that the central banks are recently growing interest in the Central Bank Digital Currencies (CBDCs). Clearly, a retail CBDC would have given everybody access to the digital representation of fiat currencies, but here it is wholesale that restricts the use to financial institutions only. The report reads;

“No major central bank intends to implement a retail CBDC in the near term. However, the debate about wholesale CBDCs has moved on from questions of feasibility to practical considerations.”

It the responses given by a total of 21 central banks, 69 percent of the banks admitted to having challenges with cross-border funds transfer institutions while 54 percent agreed that CBDC could necessarily increase speed, reduce cost and improve the resiliency of cross-border funds transfer. Also, 38 percent of apex banks were already having research for CBDC solution while others were indifferent.

Preference for Wholesale CBDC

The crux of the IBM and OMFIF survey lies on how wholesale CBDC could be further developed, tested and issued on a centrally-governed payment network.
However, the survey has further revealed that the central banks do not have so much interest in issuing a CBDC using the blockchain technology. 61 percent found no unique qualities in digital ledger technology. Though the central banks have shown half-willingness to collaborate with the private company just to achieve this feat, in this right 50 percent voted in favor.

Unification of Wholesale CBDC

The report discussed whether a CBDC could be backed by a single fiat currency or a basket of assets in the wake of arbitrage policy frameworks. But if the CBDC is being scaled to become a global reserve asset in line with the International Monetary Fund’s special drawing right, this would breed more regulatory and geographically complex consequences as the report stated;

“Clearinghouses and existing payments systems would have to either adapt to new, more efficient systems or find themselves disintermediated from payment and settlement processes in the long term.”  

Related posts
Banking RegulatorBinance.usBitcoin.comBlake PaulsonBrian BrooksCatherine ColeyCoinbaseCryptoCrypto ComptrollerExchangesNewsOCCOffice of the Comptroller of the CurrencyregulatorUS Binance

Former Comptroller of the Currency Brian Brooks to Lead Binance’s US Trading Platform

A former top regulator and acting head of the U.S. Comptroller of the Currency, Brian Brooks has been appointed the CEO of crypto exchange Binance.us. Brooks will lead the exchange on May 1st and replace the company’s current lead, Catherine…
AltcoinsAnalysisHideCryptopanicNewsNews 1Trading View

Cardano Price Analysis: 20 April

Cardano’s price has seen rangebound price movement for more than a month. While the surge that took place at the start of February did seem promising, the coin hasn’t been able to replicate such uThe post Cardano Story continues on…
AltcoinsAnalysisHideCryptopanicNewsNews 1SocialTrading View

Uniswap Price Analysis: 20 April

A lot of the gains Uniswap was able to register in the past month were undone as bearish pressure overwhelmed the crypto market a few days back. While many of the altcoins were quick to recover, UNI?The post Uniswap Story…