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Bundesbank’s president Joachim Nagel urged central banks to revamp their business models and adopt digital currencies during the BIS Innovation Summit.
Central banks’ future depends on a revision of their business model and speedy adoption of central bank digital currencies (CBDCs), said Joachim Nagel, president of the Bundesbank and member of the European Central Bank (ECB).
Nagel reportedly warned about the uncertainty surrounding central banks during a panel session at the Innovation Summit hosted by the Bank for International Settlements on May 6.
“If you would have asked me 20 years ago if the central bank business model” was “destroyable or not, I would have said no,” he reportedly stated in Basel, Switzerland. Nagel continued:
The Deutsche Bundesbank is the fourth central monetary authority to conduct research in conjunction with MIT’s Digital Currency Initiative.
The Deutsche Bundesbank is the latest monetary authority to team up with the Massachusetts Institute of Technology (MIT) Digital Currency Initiative (DCI) to study central bank digital currency (CBDC). President of the German central bank Joachim Nagel spoke at the launch of the project about challenges ahead for the digital euro.
Nagel told MIT students that the joint research will focus on designing security and privacy measures in a CBDC. The problem is that private digital payment solutions often use third-party services that gain access to consumers’ payment data, which they can use for commercial purposes. In contrast:
Nagel went on the say the current payments system does not work well. “German bank cards, for example, don’t always work in other euro area countries, even if they contain a payment scheme operated by an international company,” he said.
Officials of the European Central Bank (ECB) are not convinced that Bitcoin (BTC) is a valuable financial asset despite the US approval of a spot exchange-traded fund (ETF) for the flagship cryptocurrency. The ECB is the central bank of European Union (EU) countries that use the euro as their currency. In a new blog post, […]
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The European Central Bank (ECB) says that Bitcoin (BTC) and other digital assets have been playing the role of a store of value for many people around the world. In a new report on the global and local drivers of Bitcoin and crypto, the ECB names three things that are driving the adoption of digital […]
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Bitcoin does the complete opposite of what the EU's central bank warned about in late 2022.
Bitcoin (BTC) has gained almost 170% since the European Central Bank (ECB) warned of its impending “irrelevance.”
As noted by crypto proponent Eric Wall and others on Dec.
Bitcoin traded at just $16,400 when on Nov. 30, 2022, the ECB published a blog post dedicated to its death.
Coming just after the implosion of exchange FTX and subsequent market flight, the post argued that even those levels were a stopping point on the way to new lows.
“The value of bitcoin peaked at USD 69,000 in November 2021 before falling to USD 17,000 by mid-June 2022.
“For bitcoin proponents, the seeming stabilization signals a breather on the way to new heights.
This “last gasp” initially continued to play out.
A year after the ECB’s premature obituary, Bitcoin is at its highest since April 2022 — at $43,800 at the time of writing, or 166% higher than when the bank sounded the alarm, per data from Cointelegraph Markets Pro and TradingView.
European Central Bank chief Christine Lagarde reportedly said her son ignored warnings against crypto investments and lost “about 60%” of his money.
European Central Bank (ECB) president and prominent Bitcoin (BTC) critic Christine Lagarde has shared a family story about unsuccessful cryptocurrency investments, according to a report from Reuters.
Lagarde told students at a town hall in Frankfurt on Nov. 24 that her son lost “almost all” of his investments in crypto assets, despite persistent warnings, Reuters reported.
“He ignored me royally, which is his privilege,” Lagarde reportedly declared, adding that he lost “almost all the money he had invested.”
The ECB chief didn’t disclose the sum her son lost, noting that he claimed it wasn't “a lot,” but only “about 60%” of his crypto investments. “So when I then had another talk with him about it, he reluctantly accepted that I was right,” Lagarde reportedly stated, adding:
“I have, as you can tell, a very low opinion of cryptos [...] People are free to invest their money where they want, people are free to speculate as much as they want, (but) people should not be free to participate in criminally sanctioned trade and businesses."
Lagarde is known in the cryptocurrency community for her anti-crypto stance. In 2022, the ECB chief argued that cryptocurrencies are “worth nothing” because the assets are “based on nothing.” In 2021, the ECB president also predicted that central banks worldwide would not be holding Bitcoin anytime soon.
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While criticizing cryptocurrencies like Bitcoin, Lagarde has emerged as a major fan of the concept of the central bank digital currency (CBDC). In April 2023, Lagarde admitted that a potential digital euro would be used in a “limited” way to control day-to-day payments.
This is a developing story, and further information will be added as it becomes available.
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Agustín Carstens called CBDCs the “central element” of central bank leadership in innovation.
Central banks have a responsibility to keep pace with the digital age and lead innovation, Agustín Carstens, general manager of the Bank for International Settlements (BIS), believes.
In his opening remarks at a conference in Basel, Switzerland, on Nov. 8, Carstens called central bank digital currencies (CBDCs) the “central element” of this leadership, elaborating on the potential threats and challenges to implementing them.
One particular challenge is the variety of technological infrastructures different countries intend to develop for their CBDC projects. Carstens also mentioned cyber risks and new possibilities for “criminal activities by unscrupulous actors.”
Related: Central banks want to look under crypto’s hood — Is this a positive sign?
Speaking of the priorities in adapting the CBDCs to potential threats, the official named the flexibility of its design as the number one issue, but he also mentioned privacy problems:
“Maintaining an appropriate level of privacy, for example, will be crucial to ensuring public acceptance of retail CBDCs.”
Carstens pledged BIS support for central banks in their efforts to go digital. This support comes primarily from the BIS Innovation Hub and Cyber Resilience Coordination Centre.
The former has been active recently, participating in numerous digital currency projects. It is helping the Swiss National Bank to develop a wholesale CBDC, as well as helping to build a joint platform with the central monetary authorities of China, Hong Kong, Thailand and the United Arab Emirates and developing a proof-of-concept for a transactions tracker with the European Central Bank, among numerous other projects.
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