The European Central Bank (ECB) has said cryptocurrencies could “be an early sign of change” around the world.

In an opinion piece on Tuesday titled “Bitcoin is not the answer to a cashless society,” ECB executive board member Benoît Coeuré and Bank of International Settlements Markets Committee chair Jacqueline Loh write that, while digital money may be the way of the future, existing public cryptocurrencies like bitcoin are not that future. Rather, the pair tout the potential of central bank digital currencies (CBDCs) in changing the way consumers have control of their money.

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Still, the piece acknowledged that cryptocurrencies are addressing an important shortfall in current banking systems, noting, “Despite its many faults, bitcoin has put the spotlight on an old failing of our current system: cross-border retail payments.”

The authors continue:

“Such payments not only permit shoppers to easily buy goods online from overseas, but also allow foreign workers to send money home, supporting financial inclusion and development. However, [existing] payment channels are generally much slower, less transparent and way more expensive than domestic ones.”

To address this failing, central banks must improve international payment channels and rise to the challenge bitcoin is presenting fiat currencies, the opinion piece asserts.

The article also outlined the potential role a central bank-backed cryptocurrency could play, noting that consumers are already increasingly using digital payment systems instead of cash. Creating a central bank digital currency would grant consumers direct access to funds, rather than forcing them to go through a bank.

Stepping back, the comments echo those made in a Bank for International Settlements (BIS) report yesterday, which highlighted perceived issues with CBDCs, specifically noting that they could give customers the power to fuel faster runs, thus draining banks’ digital coffers during periods of financial instability.

However, the piece did emphasize that a central bank-backed cryptocurrency is possible, echoing remarks made by People’s Bank of China chairman Zhou Xiaochuan, who last week said it was “inevitable” that the country would one day have a national digital currency of its own.

Benoît Coeuré image via Wikimedia Commons 

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The executive arm of the European Union has issued a new report on the potentials of blockchain technology in the education sector.

Called “Blockchain in Education,” the European Commission report explores the feasibility, challenges, benefits and risks of applications of blockchain technology in schools and universities. Aimed at policymakers, the study represents an exploratory review of the topic, focusing on the state-of-the-art of the field in Europe.

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The report explained:

“This exploratory study addresses the value… blockchain may bring to stakeholders within the educational sector, with a particular focus on its potential for digital accreditation of personal and academic learning.”

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The Dutch port of Rotterdam, the biggest shipping hub in Europe, is opening a research lab devoted to blockchain technology.

Conceived as a “knowledge centre for the regional private sector” and geared towards applied research, the so-called “BlockLab” is being set up in a joint effort between the Municipality of Rotterdam and the port authority to investigate blockchain’s potential in organising port logistics and cargo flows more efficiently.

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According to a press release, initial steps include the launch of a blockchain app – developed in partnership with cloud software company Exact and ABN AMRO bank – to assist stock financing in the port logistics sector.

Maarten Struijvenberg, Rotterdam’s deputy mayor for economic affairs, commented:

“There’s this huge buzz about ‘blockchain’, but actually, there aren’t that many fully functional applications. We’ll be changing this with BlockLab. This is important, because we need real innovations to launch the next economy. And blockchain can help us realise them.”

Not all of the research at BlockLab will be entirely port related, however. The release also reveals an interest in exploring blockchain to give a boost to what it calls “energy transition” – for example, allowing firms to trade residual heat and the city’s occupants to trade electricity.

This is not the first effort that the port has made within the blockchain space. Last year, the the authority announced it would be taking part in a blockchain consortium alongside 14 major banks and universities to explore blockchain opportunities within logistics. 

Rotterdam port via Shutterstock

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