Central banks could be issuing digital versions of their own fiat currencies on blockchain. This surprising prediction was made by a top-level officer of the Federal Reserve Bank of Boston during Forbe’s annual 30 Under 30 Summit.
Blockchain-Based Fiat Currencies in Five Years
Forbes recently hosted its annual 30 Under 30 Summit held at Boston’s City Hall Plaza. One of the speakers during the two-day event is Boston’s Federal Reserve Vice President of Treasury and Financial Services Jim Cunha.
Given the popularity of cryptocurrencies and blockchain these days, it is not surprising for monetary authorities to show interest on both topics. Apparently, this interest in blockchain technology is more than just skin deep as central banks are already exploring the possibilities of applying the technology to their monetary supply.
And, according to Cunha, the day when central banks will be issuing their own blockchain-based digital fiat currencies will be coming soon. Speaking to the audience, he predicts it could happen by 2023:
“I give it five years.”
Cunha said that many central banks — including Sweden’s central bank — have already exerted efforts in trying to unlock blockchain’s potential in improving their processes and systems. Given this thrust among monetary authorities, Cunha believes that these efforts will someday result in a state-controlled fiat currency on blockchain.
Concerns on Blockchain Technology
As expected, Cunha also revealed the obstacles facing blockchain’s adoption among central banks. And contrary to what one might expect, the concern is not about the technology itself. Rather, it is the “uncertainty about the security of the organizations building blockchain” that has central bankers worried, according to Cunha. Simply put, it will be quite hard for any central bank to trust any individual or organization that wants to maintain its anonymity by using pseudonyms.
For instance, nobody knows the exact identity of the creator of the world’s largest cryptocurrency, Bitcoin. Sure everyone knows that his name is Satoshi Nakamoto, but it is believed to be only a pseudonym. Nobody actually knows whether the creator is male or female. Perhaps the token might even be created by a group of people.
Anonymity has always been valued among the blockchain crowd, and to this day, many developers opted to maintain their anonymity. This could prove to be problematic for central banks with their emphasis on know-your-customer and anti-money laundering checks.
Central Banks Could Be Issuing Their Own Blockchain-Based Fiat Currencies by 2023 was originally found on [blokt] – Blockchain, Bitcoin & Cryptocurrency News.