Christian Noyer stated that a consumer-focused central bank digital currency could still be 10 years away
Christian Noyer, former governor of Banque de France, suspected that major central banks would launch digital currency to consumers within the next 10 years. Although a report by the Bank for International Settlements has noted that more than 50 central banks are working on digital currency projects. Christian Noyer has predicted that digital payments between commercial banks will appear soon.
Christian Noyer, former governor of Banque de France. Image via politico.eu
There is “clear hesitation” from the world’s leading central banks to launch, although physical money is being used less, and cryptocurrencies are being touted by private institutions.
Facebook’s Libra and the rise of other digital currencies are causing central banks to seek to launch, but privacy and monetary policy issues, in general, are causing regulatory authorities to be careful.
The Bank for International Settlements points out that more than 50 central banks are working on token-based digital currencies. The main focus is on use by the public, not commercial banks that deal with transactions.
Sweden and Uruguay have gone as far as running pilot projects for consumer-focused digital currencies, corresponding to e-krona and e-peso.
Christian Noyer further mentioned that “Whether they will enact the projects in the next 10 years remains to be seen”. “I don’t think we are close to the departure lounge, but the fact that they want to study it means a lot of work will continue this year “, he said.
Policymakers have been under pressure to innovate by projects such as Libra, which some fear may pose a threat to the role of central banks in the financial system. But Noyer said the links commercial banks provide between consumers and the central bank would be decisive.
A consumer-focused cryptocurrency means that people will have to open accounts at their respective central banks instead of using a commercial bank. That puts consumers’ responsibility on central banks to monitor activity and prevent illegal activity. Such a move would put the financial institution responsible for inspecting customers and anti-money laundering measures.
Noyer said the digital currency for wholesale payments between commercial and central banks, the way most payments are handled in modern-day banking, is a possible compromise.
Noyer left BoF in 2015 after serving as governor for 12 years until 2015. He was also the vice president of the European Central Bank (ECB) when it was founded in 1998 and is on the board of Setl, a blockchain technology group in London.
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