After watching the development of cryptocurrencies with helplessness for a long time in recent years, central banks are preparing to launch their CBDCs. By then, cryptocurrencies will have already shaken the entire financial system to the point of stripping the attributes of commercial banks. Faced with this situation, many would think that the advent of CBDCs would serve to put banks back at the heart of the system at the expense of cryptocurrencies. However, not everyone seems to be of this opinion starting with the Central Bank of England. The latter believes that it will be up to banks to adapt to the changes brought about by digital assets..
Manage the financial and macroeconomic consequences resulting from this change
One of the main threats to the bank is the autonomy offered by cryptocurrencies to their users in terms of custody. On second thought, the very advent of CBDCs would constitute a threat to solutions provided by traditional banks. These could indeed lose their role of intermediaries although they may continue to provide access to fiat currencies. The impact of all these changes is leading some players to reconsider the role of banks, which would therefore suffer from the takeover of digital assets. A situation that does not seem to move more Jon cunliffe, Deputy Governor of the Central Bank of England.
The head of the institution made it clear that he was not not the responsibility of the Bank of England to ensure that the activities of traditional banks remain relevant. “Our job is to make sure that if the business models of the banks change, we manage the financial and macroeconomic consequences of that,” he then added. Mr. Cunliffe later said that banks will have no other choice but to adapt to changes brought about by digital assets. They will therefore have to find innovative solutions to offer so as not to simply be the interface between cryptos and the trust.
The authorities must anticipate the changes to come with the race for the CBDC
With China’s lead already testing the digital yuan, several countries have entered the race for the CBDC. A competition that should challenge the authorities according to Mr. Cunliffe for whom priority should be given to CBDCs in conversations. ” They need to get on the political agenda soon enough before policymakers find out that some private sector developments are not in line with politics. ” said Mr. Cunliffe. The many changes that will result from the widespread use of digital assets in the current financial system should be anticipated, he said.
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It will therefore be up to commercial banks to find solutions such as launching dedicated platforms allowing customers to convert their assets directly into cryptocurrency. It would be as interesting as they are now working with central banks to launch CBDCs.