The Central Bank of Germany recently published the results of an interesting assessment that they undertook , in which they evaluated potential benefits and lacunas of central bank digital currencies (CBDCs), slong with stablecoins such as Facebook’s widely-discussed crypto project Libra.
They released a a monthly bulletin called “Crypto tokens in payment transactions and in securities settlement”, which contained the conclusions of the study conducted by the Bundesbank.
Fortunately, they have been kind to Facebook’s most talked about project at the moment, Libra. The Bank believes that innovative projects such as Libra which are launched on a global scale should not be put under exessive regulatory supervision.
The bank believes that these projects are especially useful since they aim to increase prosperity and transaction costs. The bank is firmly of the opinion that stringent regulations should not stifle innovation and creativity.
“ […] a government should be as technology neutral as possible, so that the benefits of innovation can be made available for the financial sector.”
The bank has however enumerated security, monetary and financial stability as aspects that should not be compromised, and the global regulators should undertake this responsibility to ensure the above. The bank emphasized that competition in the European payments should be ensured to stay, as reported by CoinTelegraph.
The document they released also explained in detail how CBDCs can have many general advantages but that non-banking entities do not currently need to incorporate CBDCs in their system.
They have advised so since the CBDCs cannot act as a substitute for commercial bank money, which could severely hamper credit supply.