Recently, Central Banks around the globe have been willing to consider cryptocurrencies as a legal tender, and have begun exploring opportunities to issue digital currencies.
Dong He,the IMF’s Monetary and Capital Markets Department deputy director has warned in an article that in the nearest future, cryptocurrencies will have a negative effect on the demand for central banks’ issued money in the future, and that Central Banks should be willing to adopt the changing financial landscape that cryptocurrencies present.
He says that Central Banks should maintain the trust the public has in fiat currencies while staying in the game in a digital, decentralized and service economy.
He also encouraged the Central Banks to make fiat attractive as a medium of exchange in the digital economy.
The Bank of England has recently made a material step forward by researching models for central bank issued currencies. Though they have made it clear that there are no plans to develop and issue a digital currency, Mark Carney the Bank’s governor has made it clear that he his open-minded about the prospect of a bank-issued cryptocurrency.
Many feel that cryptocurrencies have come to stay while some others feel that the currency will fade out with time like the trends that go and come, Do you think the Central Banks’ adoption of the currency will affect it’s permanence in the financial and economic world?
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