Gartner Blockchain and Central Banks – What Will They Do?
It is not often I can talk about technology and economics at the same time – so when I get the chance I just have to go for it. I was catching up on my reading this morning when I came across this Economist article, A primer on blockchain-based versions of central-bank money. Of course this grabbed my eye and I devoured it in minutes. I then hot-footed it over to the source article, from the Bank for International Settlements: Central bank digital currencies. Consuming this report took a while longer but it gave me enough ammunition to ponder its findings in this blog.The point however is that the Economist article extends the real research in the BIS report from crypto- or digital currency to blockchain. The BIS article does not actually ponder how central banks will operate with blockchain; the report simply explores issues, some good and some challenging, should central banks replace some “real” money with digital money – a far less disruptive topic.
The report shows that smart economists, and presumably some smart technologists, are exploring ways in which our deb, funding and monetary systems would operate should digital currencies become more broadly based, even issues by a central bank. And that is the key point: The reports assumes that a central authority, a central bank, would simply manage the overall monetary pool – comprised of mixed assets spanning traditional forms of today with a digital asset in the future.
In other words, if the central bank needed to assure a money supply of $100, commensurate to desired inflation and currency value, this $100 could be maintained with some challenges if comprised of a mix of real and digital currency. This is a far cry from exploring what happens to central bank authority to print money should blockchain actually be used to manage a digital currency. In other words, the report is good but it has little to do with blockchain.
Read the entire article here, Blockchain and Central Banks – What Will They Do?
Via the fine folks at Gartner.