Dutch central bank wants to take a leading role in European CBDC development

Dutch central bank wants to take a leading role in European CBDC development

Digital currencies issued by central banks will be a hot topic in 2020. Meanwhile, many central banks have already discussed the advantages and disadvantages of CBDC’s, and some nations are already working on their own digital currency.

In a survey conducted this year by the Bank for International Settlements (BIS) among 66 central banks, 80% of the institutions surveyed stated that they are actively involved in the design of a CBDC. 40% of the banks have already skipped the theoretical research of CBDC’s and are now in an experimental phase.

Dutch central bank wants to take a “leading role” in development


The Dutch central bank, “De Nederlandsche Bank” (DNB) published a document on 21st April with regard to the introduction of a digital central bank currency. In the letter the bank announced its willingness to take a leading role in the development.

The institute further states that, especially with regard to the COVID 19 pandemic, the worldwide use of physical money is declining. According to DNB’s published data, cash payments continue to decline. In 2018, 37 percent of all payments in the Netherlands were still being made in cash; in 2019 the figure was 32 percent. The share of contactless debit card payments, on the other hand, has reached a higher level for the first time, at 43 percent. The total share of debit card payments was 63 percent.

CBDC’s offer significant cost and processing efficiencies


The Bank argues that a digital currency of the Central Bank would have considerable advantages for Dutch citizens. For example, a CBDC could increase the cost and speed efficiency of cross-border payments between citizens and states.

However, the report published by DNB not only highlights the positive aspects of CBDCs, but also points out potential risks. As already noted by other central banks, DNB says that Facebook’s Libra project has triggered central banks around the world to consider issuing at least one digital currency.

Overall European solution seems realistic


Whether the central bank of the Netherlands will eventually launch its own CBDC is questionable. A European solution, directed by the European Central Bank (ECB), seems more realistic. As early as January, Christine Lagarde said that new innovations were emerging in the area of payment traffic that would allow faster, cheaper and, in particular, cross-border payments to progress rapidly. According to Lagarde, the ECB and the Eurosystem should play an active role in this area and not just act as observers.

As recently reported, the presidents of the ECB and the central banks of Great Britain, Canada, Japan, Sweden and Switzerland are to examine the implementation of joint research on the possible future introduction of digital currencies (CBDC). For this occasion, a meeting was planned for mid-April in Washington before the Corona crisis.

*Originally published in German at CVJ.ch

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Crypto Valley Journal

The CVJ editorial team consists of crypto experts, active in different areas around the blockchain technology. In cooperation with selected authors, CVJ.CH provides a high-quality resource around the distributed ledger technology. Independent and up-to-date reporting according to journalistic standards as well as educational content around the topic blockchain, rounds off the offer.  All CVJ articles are translated from German and edited by MachinaTrader. Web: www.cvj.ch

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