The boom in encrypted digital currencies and the underlying technology has become so great for central banks, which have long been the custodians of official money. Until recently, officials at major central banks were happy to see them as pioneers in this field of trial and error. They know they were deceived by $ 5 trillion in daily trading in traditional currency markets. But now that officials are turning to this increasingly fast-paced technology, the danger lies in interacting very late with the turns and opportunities offered by digital money. "Central banks can not afford to deal with digital currencies like toys to play in a sandbox," said Andrew Sheng, senior advisor to the China Banking Regulatory Commission and a fellow of the World Asian Institute of Hong Kong University. "The time has come to realize that they are the real barbarians at this gate."
Betiquin - the largest and most popular digital currency - and its peers pose a threat to the existing financial system by effectively circumventing it. As money as we know it depends on the authority of the state for credibility, with the existence of central banks manage the price and quantity. On the other hand, electronic currencies have covered all this, and instead rely on technology that is supposedly non-porous in order to guarantee value.
China's main role
If they can not control the Pitcuene and similar e-currencies, in addition to more people to adopt these currencies, it is possible to see central banks reduce their control over the money supply. The solution may be in the old saying, if you can not beat them, join them. The People's Bank of China (PBOC) has launched an experimental electronic currency model, making it a step closer to being the first major bank to issue digital money. The Bank of Japan and the European Central Bank also launched a joint research project examining the possibility of using Blockchain, a technology that supports encrypted currencies, in the market infrastructure. The Dutch Central Bank has created its own electronic currency - for internal trading only - in order to build a better understanding of how to deal with it.
Russia has also shown interest in lithium, the second largest digital currency, where the central bank has published an experimental Bluchen program. In the United States, both banks and regulatory bodies are considering distributed accounting technology. Fed officials have given two official speeches on the subject over the past 12 months, but have expressed reservations about the digital currency itself.
Political problems
Federal Reserve Governor Jerome Powell said in March that there were "important political issues" related to digital currencies that needed further study, including exposure to cyber attacks, privacy and fraud. He also warned that the central bank's digital currency could hinder innovations to improve the current payment system. At the same time, it is clear that central bankers are concerned about the risks posed by alternative currencies - including financial instability and fraud. Examples include the collapse of the platform "Mt. Gox "to exchange spectacularly in 2014 after it revealed that it had lost hundreds of millions of dollars worth of Pitcairn. But for all its theoretical processes, the official money-keepers were largely standing with these currencies at the time they were disclosed.
The top 20 electronic currencies are valued at about $ 150 billion, according to data from Coinmarketcap. The currency of the Betquin itself has risen more than 380 per cent this year to a record - but on the other hand it is vulnerable to extreme volatility, such as a 50 per cent decline at the end of 2013. Daniel Heller, visiting fellow at the Peterson Institute for International Economics and President "In the world, there is an urgent need for regulatory clarity in view of market growth."
Self- interest
Instead of trying to regulate the world of virtual currencies, central banks are primarily warning about risks and trying to get some advantages from distributed book technology for their own purposes, such as the development of payment systems. Karl Ludwig Thiel, a member of the board of the German Bundesbank Bank, said that Betcuene was a "central phenomenon" but that it was most interesting if the technology could be adopted by the central bank. In July, Austrian economist Iwald Nautny said he was open to these new technologies but did not believe that they would lead to a new currency, and that dealing with Betcquin was an effective "gamble".
A part of monetary policy could also be considered. European Central Bank Board member Jan Smitz said in December that the central bank's digital currency could give policymakers more opportunities when interest rates were negative. Policymakers have long been concerned that if they cut interest rates too much, people will simply earn money. The ECB's deposit rate is currently 0.4 percent negative. In addition, other central banks are considering the use of distributed account book technology, but are concerned about default fund overruns in whether they can be placed outside the formal system - such as criminal money laundering and the sale of illicit goods. Not to mention the risks that virtual currencies could pose to the rest of the financial system if it were just a bubble.
Big promises
The governor of the Bank of England, Mark Carney, said the bloc was carrying "big promises" this year to keep them at the top of new developments in financial technology if they wanted to avoid a crisis similar to that of 2008. Platform Mt. Gox overshadowed the Betquin in Japan, now has many supporters in the world's third-largest economy. Parliament passed a law in April this year, classifying this currency as a legal means of payment. The largest Japanese banks have also invested in petty cash exchanges, small stocks linked to electronic currencies or the technology behind them, which this year seems to have satisfied some retailers. With the country's financial services agency responsible for the organization of the Betquin, the Bank of Japan will continue to focus more on the study of distributed accounting technology.
Lack of readiness of central banks for that
"Central banks are not yet ready to regulate digital currencies, but they have to do so in the future because unregulated digital currencies remain vulnerable to the crime and speculation of the bonsai," said Xiao Geng, professor of finance and public policy at Hong Kong University.
Sure, attracting digital currencies for many is still just speculation, and it is not for families or companies that buy and sell goods. "It's just a passing fashion, it will collapse, it will be used by less than 1 percent of consumers, and it will be accepted by a few traders," said Sumit Agrawal of Georgetown University, a former chief financial economist at the Federal Reserve Bank of Chicago. "Even if we can make the digital currency safe, it still has many obstacles," he said.
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