The Dutch want a "leading role" in the development of a European CBDC

The central bank of the Netherlands, De Nederlandsche Bank (DNB), recently published a report in which it places great emphasis on the idea of ​​investing in a Central Bank Digital Currency (CBDC). The bank said that a CBDC would be a great advantage for its citizens and would like to play a leading role in its development.

The DNB report in favor of a European CBDC

The Dutch central bank said it had "a positive attitude towards the CBDC" and that "it could serve as a support for payments made in private money, considering that we become extremely dependent on private money in a rapidly digitized payment system".

The report notes that during the coronavirus crisis, people rely even less on cash and a CBDC could be decisive. The bank also indicated Facebook's Libra project as a possible threat to monetary stability, despite Libra's recent restructuring in an attempt to placate global regulatory bodies.

The DNB added, however, that a digital currency could also pose risks. "In times of financial crisis, it could accelerate the collapse of banks as citizens and businesses try to avoid risks by converting the funds they hold with commercial banks into CBDC," said DNB.

"Consequently, it is essential to take measures to control the amount of CBDC in circulation." DNB went on to say that it would like to continue with the research and development of a CBDC and has called for "a broad debate across the euro area". "We are ready to play a leading role," said the Dutch central bank.

80% of the world's central banks are working on the launch of their digital currency

CBDCs differ from other digital currencies, such as Bitcoin, in that they are issued and regulated by government institutions and anchored in legal currencies, such as the US dollar or the euro. Countries around the world are moving to find out if a CBDC could be beneficial for their economies.

According to a recent study by the Bank of International Settlement, 80% of the world's central banks are working on the launch of their digital currency. The Bank of England has conducted collective research on digital currencies, together with the Bank for International Settlements (BI) and five other major central banks in the world: the Bank of Canada, the Bank of Japan, the European Central Bank, Sveriges Riksbank and the Swiss National Bank.

While the central bank of South Korea is working on the development of a state-backed digital currency, although there are still no plans for an immediate release. China, meanwhile, has completed much of its digital currency development. The country recently released its digital yuan in a civil servant beta test.