Central banks form group to explore digital currencies

The RBA could be called in to buy up Australia’s coal mines

The Bank of England said on Tuesday that it had created a group with other central banks to assess the potential of central bank-backed digital currencies.

The project is to be led by the Bank of International Settlements, chaired by Bank of England Deputy Governor John Cunliffe and head of the BIS Innovation Hub Benoit Coeure. Other banks include the Bank of Canada, the Bank of Japan, the European Central Bank, the Sveriges Riksbank - of Sweden, and the Swiss National Bank.

Now a board member at IT consulting firm Future Corp, Yamaoka oversaw the BOJ's research into digital currencies and retains close contact with global central bank policymakers.

Just one day ahead of the start of the World Economic Forum in Davos, Switzerland, at which climate change is the major focus, the BIS said in its "The Green Swan" report central banks need to integrate climate-related risks into their analyses of financial stability.

And, although the move could put the success or indeed existence of bitcoin in jeopardy, some analysts believe the omittance of The Federal Reserve from the Central Bank Group may even be a direct threat to the might of the USA dollar.

"Total assets of such central banks are: Japan (US$ 5 trillion), PBOC (US$ 5 trillion), The Fed (US$ 4 trillion) and The Bank of England (US$ 1 trillion)".

"I'd urge this group of banks to reach out to the existing cryptoasset sector and get their input, to understand their experience and expertise when assessing the benefits and the challenges of digital coins".

Central banks and monetary authorities around the globe are increasingly exploring CBDCs. "Central banks are not going to save the world again".

The European Central Bank (ECB), for example, has already assembled a task force to assess the feasibility of a euro CBDC. The CBDC working group will facilitate collaboration in the area of digital currency development and encourage the sharing of previous research and trials conducted.

"There is certainty about the need for ambitious actions despite prevailing uncertainty regarding the timing and nature of impacts of climate change", the paper says.

But the research says that governments should not rely on central banks to bail out the fossil fuel industry, saying ideally governments establish meaningful policies that support a rapid, but planned, transition of the economy including the introduction of a price on carbon emissions.

"On the other hand, central banks can not - and should not - simply replace governments and private actors to make up for their insufficient action, despite growing social pressures to do so".



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