A Member of the Governing Council for the European Central Bank (ECB) has spoken positively about central bank crypto or central bank digital currencies (CBDC), labeling them as unique and more efficient offerings from global central banks.
Vitas Vasiliauskas specifically names distributed ledger technologies (DLT) as useful for having positive impacts on financial stability and mitigating the need for intermediaries, although did not extend these thoughts to decentralized cryptocurrency like Bitcoin, insisting that they were very different from central bank crypto.
He explained:
“The CBDC would be a novel type of central bank money. Although also digital, it should be distinguished a traditional reserve account. The CBDC would also be fundamentally different from private crypto assets. This is because it would be — money! It would serve as a medium of exchange, a means of payment and a store of value, just like the current forms of central bank money.”
He praised the characteristics of DLT features in would-be implementations of central bank crypto, saying that “wholesale CBDC” could enhance payments and make securities settlement more efficient, while reducing counterparty credit and liquidity risks. He elaborated:
“In terms of the retail CBDCs, different motivating factors are in play. Clearly, we live in an age characterized by the rise of electronic payment methods. Although these are often more convenient and efficient than paper banknotes, such digital payment solutions are based on commercial bank money.”
Vasiliauskas, who is also the chairman of the board for the Bank of Lithuania and a member of the Board of Governors of the International Monetary Fund, had made these comments at a central banker conference in Washington this week. The Bank of Lithuania falls under the purview of the Bank for International Settlements (BIS).
Last year, BIS made comments against the industry, when general manager Agustin Carstens, told cryptocurrency developers that they should leave the bankers to do the job of creating money.
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