Quote
Bitcoin-like money may emerge in countries where cash is in decline or financial networks need updating. The people of Sweden are breaking up with cash. The number of banknotes and coins in circulation has fallen to its lowest level in three decades. Riksbank, Sweden’s central bank, estimates that cash transactions made up only 15 percent of all retail transactions last year, down from 40 percent in 2010, thanks in large part to massively popular mobile payment services.
The situation has left Sweden’s central bankers wondering: should the country introduce a purely digital form of government-backed money? And if so, should it use technology similar to that underlying Bitcoin? Riksbank isn’t the only central bank taking a serious look at blockchain, the technology that makes Bitcoin and other cryptocurrencies run. These systems, also called distributed ledgers, rely on networks of computers, rather than a central authority like a bank, to verify and record transactions on a shared, virtually incorruptible database. Government bankers across the world believe this has the potential to replace cash and make other payment systems more efficient.
Central-bank-backed cryptocurrencies would be ironic indeed, given that Bitcoin was created as a way to circumvent the need for banks. Beyond that, the idea raises complicated questions about how such systems should be designed, built, and maintained, as well as how they could affect a country’s—or the entire planet’s—financial stability.
More of this latest development here...
The situation has left Sweden’s central bankers wondering: should the country introduce a purely digital form of government-backed money? And if so, should it use technology similar to that underlying Bitcoin? Riksbank isn’t the only central bank taking a serious look at blockchain, the technology that makes Bitcoin and other cryptocurrencies run. These systems, also called distributed ledgers, rely on networks of computers, rather than a central authority like a bank, to verify and record transactions on a shared, virtually incorruptible database. Government bankers across the world believe this has the potential to replace cash and make other payment systems more efficient.
Central-bank-backed cryptocurrencies would be ironic indeed, given that Bitcoin was created as a way to circumvent the need for banks. Beyond that, the idea raises complicated questions about how such systems should be designed, built, and maintained, as well as how they could affect a country’s—or the entire planet’s—financial stability.
More of this latest development here...
Well, there is really nothing that can stop governments from also jumping themselves into the cryptocurrency bandwagon by means of introducing their own versions of Bitcoin. Now, since these coins are government-backed and controlled by the central banks, these can just be considered as fiat money in digital forms.
The way I see it is that these digital currencies coming from the governments would just be replacing the paper money we already have. And though they can be in digital form, I wonder if they can also be called as part of the cryptocurrency ecosystem.
More importantly, how successful can it be since it is backed by the government no less with all the resources and control available at their disposal or will the idea itself backfire?