Yesterday we reported on how government adoption of Distributed Ledger Technologies / Blockchain, has been increasing. This rise in popularity has not been limited to governing bodies though. In recent months we have seen growing levels of interest by central banks themselves. It would seem that they have finally reached a level of acceptance towards blockchain, realizing that it is here to stay. Here are a few recent examples of central banks and the roles they are playing in the world of blockchain.
The Reserve Bank of India
Announced just today was the formation of an emerging technologies research unit. This unit will function within the Reserve Bank of India. It will serve to build an understanding of distributed ledger technologies, artificial intelligence, and cryptocurrencies.
Upon building an understanding of these new fields, the Bank will be better positioned to create and enforce appropriate regulations.
Monetary Authority of Singapore
A new partnership was made public today as well. The Singapore Exchange, and the Monetary Authority of Singapore announced a joint venture. This will result in the development of a platform aimed towards settlement procedures of digital assets.
Development of the platform will proceed with the assistance of three external companies. These include Deloitte, Anquan, and NASDAQ.
Central Bank of Brazil
With a goal of streamlining the data transfer process between government agencies, the Central Bank of Brazil has created a blockchain based platform. Dubbed ‘PIER’, this platform will go live be the end of 2018.
The Central Bank of Brazil has noted that blockchain was chosen for this endeavour due to its immutability, and ‘trust-less’ nature. The deputy head of the bank stated, “”Together the automation of data searching and the guarantee of both authenticity and origin of the information will yield efficiency. With Pier, any participant will be able to retrieve data almost immediately, and the platform will decrease error incidence by eliminating manual processes of data retrieval and sharing. Agility gains and fewer mistakes are expected to reduce costs”
Central Banks of Curacao and Sint Maarten (CBCS)
Taking a different approach to digital assets, the CBCS has announced that they will be creating their very own cryptocurrency. The CBCS has opted to go this route, as their monetary system is somewhat unique.
Functioning as a subsidiary of the Netherlands, these small islands must deal with cumbersome, cross border payments consistently. Through the introduction of a bank issued digital currency, the issues associated with cross-border payments are eliminated.
On the subject, CBCS President Leila Matroos-Lasten commented, “The CBCS herewith recognizes the transformative potential of innovation and technology and is committed to exploring solutions regarding efficiency of cross-jurisdictional transactions and digital payments whilst ensuring compliance and security assurances obtained by these state of the art (fintech) solutions…this would be beneficial to everyone.”
The amount of central banks involved in blockchain are not exclusive to this list. These are but only a few of the early adopters of DLT. As with tech adoption in any field, as the merits of DLT are proven, and use cases are born, look for increasing amounts of central banks to jump on board. Some have opted to create their own currency, while others a DLT based platform. Regardless of the shape that the adoption takes form, look for this acceptance to continually increase.