Dutch central bank wants to play a leading role in digital currency development

advertisement

The central bank of the Netherlands, De Nederlandsche Bank, says it wants to be a world leader in the development of central bank digital currencies.

In a bulletin posted Tuesday, the bank said that the use of physical cash is "clearly" declining in the Netherlands, meaning that people are using less central bank-issued money to buy things. "A question that naturally springs to mind is whether central banks should provide a new type of money that is better attuned to the needs of citizens and firms."

A CBDC could "promote diversity in the payments market" in addition to making cross-border payments more efficient, said the bank. Perhaps more importantly, it can help "foster trust in the monetary system in times of uncertainty," it said.

The freedom to exchange commercial bank money for central bank money is essential to preserve because it helps maintain the essential trust that people have in the monetary system, argued the bank. That's why despite the potential risks, the bank says it has "a positive attitude" toward CBDCs.

If the European Central Bank were to decide to test such a system—something it recently expressed in doing— "we are ready to play a leading role," the Dutch central bank said.

Other central banks around the world, including the People's Bank of China, are putting their weight behind such projects. As The Block reported earlier this month, a test app tied to the Chinese central bank's efforts was briefly available to the public as part of a planned experiment.

What's more, a recent shifting of the gears by the Libra Association – which oversees the development of the Facebook-backed stablecoin initiative – strongly indicated that it hopes to cater to the world's central banks as they look to launch digital currencies. 

Related Reading

Get Your Crypto
Daily Brief

Delivered daily, straight to your inbox.

Layer-1 Platforms: A Framework for Comparison

The Block Research was commissioned by Algorand to create Layer-1 Platforms: A Framework for comparison, which provides a “look under the hood” at seven platforms: Algorand, Avalanche, Binance Smart Chain, Cosmos, Ethereum/Ethereum 2.0, Polkadot, and Solana. We assess their technical design, related ecosystem data, and qualitative factors such as key ecosystem members to get an understanding of how they differ. Having done this analysis, we draw some insights for what the future of the broader smart contract landscape could look like for years to come. 
Read Full Story
Aug 11, 2021, 5:18PM UTC
More