Global central banks could adopt cryptocurrencies

WION Delhi Jan 23, 2020, 01.23 PM(IST)

File photo. Photograph:( Reuters )

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Cryptocurrency could find more legitimacy than ever before because of some of the world's largest central banks.

Last year Facebook announced its digital currency - Libra - which seen as a savvy business move, but American lawmakers raised red flags over the entire project.

However, the Bank of England has different ideas - they might end up embracing cryptocurrency.

From being hailed as the future of money to being snubbed and barred, the cryptocurrency has faced the entire spectrum.

But now it could find more legitimacy than ever before because of some of the world's largest central banks.  

Right after Facebook revealed its plans, the European central bank expressed an interest. China too has been busy readying plans for a state-backed cryptocurrency.

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And now the Bank of England has created an international group for it. The central banks of Japan, Sweden, Switzerland and the Eurozone have joined the initiative along with the bank of international settlements.

This new group will be co-chaired by ECB board member Benoit course and Bank of England Deputy Governor Jon Cunliffe. The cryptocurrency industry has given the move a double thumbs-up expectedly. They are glad that the potential of the bitcoin is finally being recognised.

But they are also aware that this is just the beginning of what could be an extremely long-winding process. In the meantime, the facebook-led project libra itself has faced intense regulatory pushback.

Central bankers from the US to Europe have warned about potential risks of Libra to global financial stability. Vodafone is the latest company to leave Facebook's digital currency project which has seen an exodus of backers including PayPal, e-bay and Mastercard amid regulatory scrutiny.

China has been racing to issue its own central bank digital currency, but its efforts in the space have so far been sketchy in terms of details.