The bank has an open mind about the eventual development of a central bank digital currency (CBDC) and an active research programme dedicated to it. However, a true, widely available reliable CBDC does not appear to be a near-term prospect, given the current technological shortcomings in distributed ledger technologies, according to the bank’s representative.
The letter debated whether cryptocurrencies can be viewed as currencies, replacing fiat money, or assets. At the moment this topic is of growing interest to policymakers, many of whom prefer to term them crypto-assets expressly because they are not true currencies. In the US, the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) representatives have debated over what Bitcoin should be considered: a commodity, a security, or a hybrid.
Furthermore, crypto-assets raise a host of issues around consumer and investor protection, market integrity, money laundering, terrorism financing, tax evasion, and the circumvention of capital controls and international sanctions.
However, when regulating cryptocurrencies, authorities should be careful not to stifle innovations which could in the future improve financial stability, support more innovative, efficient and reliable payment services as well as have wider applications.
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