On the first day of the G20 Summit, the finance ministers and central bank governors will meet up. With digital currencies being center of attraction and given the central bank’s tilt towards building up their own particular cryptocurrency, this will absolutely be the point of discussion.
Central Banks are progressively moving towards digital currencies, however passing by the report of the Bank for International Settlements (BIS), these state-backed cryptos contrarily impacts the financial framework and can prompt cross-border panics which is only an exertion on central banks’ part to decimate the outside rivalry.
Also, different banks having their own digital currency can be difficult to screen, control and regulate.
Things being what they are, the question that emerges here is if the G20 Summit 2018 meeting would encourage the state-backed digital currency or would rather settle on worldwide digital currencies?
Out of 20 countries that are part of this summit, the greater part of them is either keen on the state-backed digital currency, experiencing the advancement procedure or have officially declared their plans. Some of these nations should be kept an eye out on the first day of G20 summit 2018.
With regards to European Central Bank, it has over and over cautioned about the threats of investing in digital currency. In November however, the President of ECB, Mario Draghi expressed that the effect of these virtual currencies on the economy is constrained. Given ECB’s position on digital currencies, it is likely that this bank won’t be supportive of countries building up their own particular currencies.
- India’s Reserve Bank of India (RBI) has always been opposed to the cryptocurrencies, however, it has created a committee to study about state-backed digital currency and its potential use and benefits.
- Japan’s central Bank FinTech Center has no interest in creating their own cryptocurrency as it believes through the cashless transaction is on the rise, there is no demand for a digital currency yet.
- The governor of Bank of England Mark Carney sees cryptocurrencies as something that has the potential to bring revolution in the finance industry but it is a long way from developing sterling’s digital version.
- In the US, cryptocurrencies are still in its early days of investigation by Federal Reserve System and authorities believe that there are challenges like privacy in state-backed digital currency.
- The Central Bank of Russia has expressed concern over the digital currency and believes that Putin commissioned CryptoRuble, which basically violates the law doesn’t have the demand.
- China has cracked down hard on cryptocurrencies but the country’s central bank, People’s Bank of China is already running the prototypes for its own digital currency.
All that being clarified, the BIS says the development of digital currencies can’t be disregarded yet digital currencies by central banks pose stability risk. It is fascinating to watch the sort of points the meeting will put crosswise over and the ensuing choice to be achieved.