ING isn’t the only institution that’s expecting central bank digital currencies (CBDCs) to be a thing quite soon.
According to a report conducted by old-school tech firm IBM and the Official Monetary Institutions Forum (OMFIF), we can expect to see fiat-based digital currencies within the next five years.
These currencies will exist as “either a complement to or as a substitute for notes and coins.” With that in mind, one struggles to see how these currencies are any different to the digital representations we have in our online bank accounts now.
The report states that it’s most likely the first CBDC will be launched by a G20 central bank in a smaller and less complex economy. For the main reason that there will be fewer regulatory hurdles to overcome.
As part of the study, representatives from 23 banks were asked about CBDCs. More than half of them feared that projects like Facebook‘s Libra would undermine monetary sovereignty.
IBM isn’t the only firm that’s expecting CBDCs to become a mainstay of our banking future.
Earlier this month, Dutch bank ING published an article speculating that we would see a “fully-fledged central bank digital currency” in the near future.
ING’s chief economist Mark Cliffe and its lead economist for digital finance Teunis Brosens said we “might well see a central bank digital currency emerge within the next five years.”