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The Central Bank of the Czech Republic saw the similarity of CBDC with “helicopter money”

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The Central Bank of the Czech Republic saw the similarity of CBDC with 'helicopter money'

The Central Bank of the Czech Republic saw the similarity of CBDC with “helicopter money”
CONTENT

  • The Czech central bank considers the emergence of CBDC in the near future unlikely.

  • The integration of digital currencies would require a change in European legislative standards, according to the Central Bank of the Czech Republic.

  • So far, there is no ready-made option that would not be inferior in efficiency to cash, says Tomas Golub, a board member of the Central Bank of the Czech Republic..

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Central Bank Compares CBDC Paper bills and coins may be a thing of the past due to a new financial instrument – central bank digital currency (CBDC). As … More with “helicopter money”, and also saw difficulties at the legislative level for the implementation of the idea.

Czech National Bank sees legislative obstacles to implement the concept of a central bank digital currency (CBDC).

This opinion was expressed by a member of the Board of the Central Bank of the Czech Republic Tomas Golub in an interview with Bankovnictví.

The Central Bank of the Czech Republic saw the similarity of CBDC with 'helicopter money'

Tomasz noted that from a technical point of view, the idea of ​​CBDC is quite attractive, although it represents “helicopter money”.

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However, the main obstacle to the introduction of such currencies at the national level is legislation.

According to Tomas, the snag is the legal basis for the issuance of loans by the central bank in the form of digital currencies..

“I’m not sure if politicians have a desire to give us [the central bank] this power,” Tomas said..

House of cards

The Czech National Bank believes that the implementation of CBDC at the national level became possible only in the case of a long struggle to change the law, which would violate the European legislative standard..

“… we would have to fight to change the law, which says that the central bank can conduct transactions in the financial markets regardless of the counterparty, maturity and type of instrument, which fully complies with the European legislative standard,” added Tomas.

Having solved the political situation with the European Union, the Czech Republic could effectively fight deflation with the help of CBDC.

Tomas stressed that so far he has not been able to see a CBDC option that would solve several issues at once, including: anonymity, AML standards, as well as state income from interest from the issuance of such currencies..

It’s a question of time

Due to the fact that in the Czech Republic today the share of fiat currency in circulation is still relatively high, the likelihood of a quick transition to CBDC is extremely low.

The Central Bank of the Czech Republic saw the similarity of CBDC with 'helicopter money'

“The idea that cash will disappear in our country is not very realistic,” added Tomas.

The impact of CBDC on payment systems is recognized not only by financial institutions, but also by payment providers themselves.

The BeInCrypto editorial staff previously reported that the cryptocurrency division of the payment giant Visa agrees that CBDC can become the most important direction in the development of payment systems in the next decade..

Despite the mutual recognition of the importance of digital currencies of central banks, not all countries are in a hurry to develop their own digital analogue of paper currency..

Former Commissioner of the US Commodity Futures Trading Commission Sharon Bowen said the US is lagging behind other countries working to create a central bank digital currency or CBDC.

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