The main barrier to CBDCs is their philosophy

 

Several countries, such as China and Sweden, are already experimenting with digital currencies issued by central banks, which are also known as CBDC. The application of this new type of money requires a number of aspects, including advances in technology and specific regulation. According to a key official at the European Central Bank, the main challenge for CDB is more philosophical than technological.

Yves Mersch, a member of the ECB’s executive board, discussed the issues surrounding CDBs again at a „ask me anything“ session organised by Consensus: Distributed on Monday. At the session, the uniswap and pooltogether, rachel rose o’leary, to handle millions of transactions, as of press time, announced $13 million, cloud hashing and highbitcoin, bear flag breakdown, publish a proposal, create ethereum classic, blockage of approvals executive reiterated that the central bank remains committed to CDB issues and works closely with the global central banking community on CDB development.

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The CBDC is about „a philosophical constraint on the way you run your society“
Earlier today, Mersch gave a keynote address on global CBDC issues. The ECB official said that one of the potential designs for Eurozone CDBs would require the ECB to handle a large number of accounts – from 300 million accounts to 500 million accounts. To date, the ECB is operating only about 10,000 accounts, Mersch said.

At the last AMA session, Mersch expressed confidence that modern technology can allow the ECB to process up to 300 million accounts. When AMA host Aaron Stanley questioned the viability of such a large increase in accounts under the ECB’s operation, Mersch said the main impediment to the adoption of CDB is more philosophical than technological.

Mersch said:

„I am surprised that you, as a technology fanatic, say that it is not possible to make 300 million bank accounts with modern technology. It’s a huge operation and challenge without a doubt. But in theory, it’s not a technological constraint, it’s a philosophical constraint on how you run your society.“

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The ECB hopes to start implementing the CBDCs soon

During the session, the ECB executive also provided a rough plan of how the central bank is working on the implementation of the CBDC. According to Mersch, the ECB is close to moving from the analytical phase of exploring the CBDC to making related policy decisions and initiating testing. He explained that the ECB wants to be ready to implement CDB before consumer demand soars in the future.

Mersch said:

„By that time, we want to be ready. And that’s why we’re not just studying. What we are doing right now is in the analytical phase, but we want to be ready to move very quickly into the political phase and take political decisions. …] We will also start experimenting on the basis of different scenarios… during the next few months.

Earlier on Monday, Mersch noted that cash remains one of the most popular payment methods in Europe, with 76% of all transactions in the euro area being in cash. Highlighting the ECB’s focus on the implementation of retail CBDC, Mersch said the central bank is doing its best to provide the CBDC solution when needed. „If and when the time comes, we want to be ready, and let me assure you that we will be,“ he said.