Central banks

From brokering insurance contracts to financial settlements, smart contracts could bring immense innovation to CBDCs that otherwise would act as little more than an augmented medium of exchange, says Cypherium's Sky Guo.

By allowing access to public chains, CBDCs could render much greater, and even revolutionary, functionality, says Cypherium's Sky Guo.

The events of 2020 have only helped to intensify a range of potentially disruptive developments in the payment industry. As the central bank's digital currencies advance, how will the government and the private sector work together to bring projects to an effective conclusion?

Bitcoin has underpinned the next generation of currencies, while showing that central banks are not necessarily needed as administrators or gatekeepers.

The global digital currency race has heightened the threat to traditional monetary policy and the dollar’s dominance, enough for the Federal Reserve of Boston to make a concerted effort to keep pace.

A CBDC has the potential to be a real game changer for the payment industry if one condition is met: central bank digital currency has to be built as an open and shared infrastructure for the private sector to easily build on top of it, says ConsenSys' Matthieu Saint Olive.

Were the Fed to develop its own payments platform, it would be expensive, duplicative, inefficient, and curtail development of real-time services, argues the National Taxpayers Union's Thomas Aiello.

For more than a year, the central bank has been under pressure to speed the development of a real-time payment system. But it faces tough questions about what its own role should be.

Society has accepted central banks’ monopoly over creating and controlling the flow of money, but history and current technological innovations point to alternative approaches.

As payments guru David Birch notes, multiple currencies spur competition and innovation, and can reduce stagnation, writes Eric Grover, a principal at Intrepid Ventures.