Are Central Banks Drawn To Bitcoin Or Bitcoin Technology?
As it is known that Bitcoin was created by a libertarian-minded programmer who had a deep suspicion about central banks and the currencies they issue. Yet these central banks are the ones doing some of the most ambitious work in an attempt to try to harness the technology introduced by BTC.
The central banks are against the use of bitcoins itself. Instead they are hoping to use the decentralized method to keep records like Bitcoins use of blockchain, a distributed ledger which keeps record of every transaction ever made.
The Bank of England and the People’s Bank of China are few of the enthusiastic central banks which have even discussed issuing their national currencies to some sort of distributed ledger. For Central Banks, the promise of this technology is that this would allow them to keep track of every pound or other currencies on every step of its travels in real time – something which seems impossible these days. The goal is to make their financial systems faster, more transparent, efficient and secure.
The Bank of England has managed to produce several research papers with one suggesting that economic benefits of issuing digital currencies on distributed ledgers could add up to as much as 3 percent to their country’s economic output because of the efficiency it would offer.
Eric Piscini, the man who oversees work on Blockchain by consulting firm Delloitte said that about an ago most of the central banks were looking at their technology because they wanted to understand exactly what the private banks were talking about. But now, they are embracing this technology to completely revamp their own infrastructures.
Ron Berndsen set up an experiment at the headquarters of Dutch Central Bank in Amsterdam. He set up five laptops and run an experiment on a virtual currency. The coins issued in this system were called ‘Dukatons’. Berndsen carried on with this dukaton system for three months so that we could see if the central bank was setting up the rules or had the same limits as Bitcoin.
His experiment was a huge success and he is no in talks with the officials of Central Bank who are looking for ways to put their own currencies on the distributed ledger.