ASSESSMENTS

Why Central Banks Could Mint Their Own Digital Currency

Mar 28, 2018 | 08:00 GMT

A worker passes a bitcoin mining operation in Quebec in March 2018.

Following the boom and (partial) bust of various private cryptocurrencies over the last six months, several central banks are seriously considering introducing their own national digital currencies.

(LARS HAGBERG/AFP/Getty Images)

Highlights

Only 8 percent of global financial transactions today involve cash, but that figure will diminish even further as digital currencies gain prominence.
Faced with the growth of cryptocurrencies such as bitcoin, central banks around the world will continue their research into introducing their own digital currencies.
By entering the market for cryptocurrencies, central banks could pose a profound threat to the commercial banking business model.

From the Marshall Islands to Russia, it seems everyone's on board with the year's hottest trend: digital currency. Following the boom and (partial) bust of various private cryptocurrencies over the last six months, several central banks are now seriously considering introducing their own national digital currencies in the near future. These currencies won't just be bit players in a field dominated by the likes of bitcoin; instead, the central banks' entry into the crypto game could have a significant effect on individual customers, commercial lenders and the international monetary system itself....

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