The Governor of the Central Bank of Ireland (CBI) Gabriel Makhlouf published a blog post sharing his views on the digitalization of finance. While responding to peer concerns about cryptocurrency, the official also highlighted some of their positive factors.
The governor of the central bank said, do not ignore the positive factors of encryption technology
The article titled “Digital Currency” is Publish On the bank’s website on Thursday. In the post, Gabriel Makhlouf discussed the project to issue a digital version of the European Common Currency.The European Central Bank (ECB) recently roll out Its “investigation phase”, although final decision No action has been taken, and the governor believes that this is not a question of “whether”, but a question of “how and when” the introduction of the digital euro.
In addition to the central bank digital currency (CBDC), Makhlouf focused his attention on the rise of decentralized currencies, which is a factor in the increasing degree of financial digitization. To avoid “misleading descriptions” of “cryptocurrencies” and “not very accurate” “crypto assets”, bankers refer to coins, stablecoins and tokens as simply “crypto”.
Gabriel Makhlouf said: “As individuals consider investing part of their funds in cryptocurrencies, the risks are increasing,” among the threats faced by investors and governments, cited the lack of transparency, price fluctuations, high energy consumption and fraud risks. The Irish official concluded: “As far as today is concerned, the negative effects surrounding cryptocurrency far outweigh any benefits.” However, he also insisted that the authorities should not ignore the positive factors of the underlying technology of cryptocurrency. The Governor of CBI stated:
Distributed Ledger Technology (DLT) is essentially a secure and decentralized information record stored in the network, and is a key architecture for certain types of encryption.
Makhlouf emphasized that DLT can reduce the cost of financial transactions and in some cases eliminate intermediaries, while also praising the opportunity to issue smart contracts. The governor added: “In recent years, the use of DLT has increased-it certainly has potential-although its popularity remains to be seen.”
As governments around the world study options for adopting blockchain technology in their digital currency designs, the importance of DLT may increase. A recent experiment has involved the participation of several central banks from the Eurozone and the European Central Bank. Indicated The blockchain-based digital euro will be highly scalable. The Central Bank of Estonia revealed earlier this week that the tested CBDC system is capable of processing more than 300,000 transactions per second at the same time.
Do you expect most central bank digital currencies to be based on digital ledger technology? Let us know in the comments section below.
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