Central Bank of Netherlands Ready for CBDC Development

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The Central Bank of Netherlands, De Nederlandsche Bank (DNB), released a statement stating its position in regards to CBDC. The bank is ready to play a leading role in its development.

In line with recent digital advancement, the Central Bank of Netherlands, De Nederlandsche Bank (DNB), released a statement saying its position as regards central bank digital currency (CBDC).

DNB, in the statement, revealed that they agreed with the idea of a CBDC. They claim it would be of immense benefit to Dutch citizens. DNB also said they are ready to be at the front line and perform a major function in creating a CBDC.

In the statement, DNB said it has “a positive intent for the CBDC”. It also explained that “CBDC could be a contingency to payment made in private money”. This is because they become over-reliant on private money in a digitizing payment system. The Bank noted further that with the COVID-19 pandemic, people no longer rely on fiat like before as CBDC is a potential solution.

The Central Bank of Netherlands also acknowledges that CBDC comes with several issues. DNB acknowledges that whenever financial crisis looms, CBDC would enhance bank users to withdraw their money as they avoid risk converting changing fiats to CBDC. However, they understand it is sacrosanct DNB controls the amount of CBDC in circulation.

In conclusion, the Central Bank of Netherlands intends to forge ahead in CBDC research. They also want CBDC development urging for a broad debate across the euro area.

Difference between CBDC and Cryptocurrency

As CBDC and cryptocurrencies are both digital assets and currencies, they both are more different than similar. CBDC’s are different from Crypto coins/assets like Bitcoin and other altcoins. CBDC, in every case, are doled out by a central bank regulated by the government as these assets are tied to the value of an equivalent fiat currency.

However, several countries around the globe are carrying out research to see how much benefits CBDC will add to their economy once it is adopted. Also, a study by the Bank of international settlements (BI) reveals that around 80 percent of countries central banks are preparing to float their own CBDC.

Not Only Central Bank of Netherlands, Other Banks Want to Work with CBDC 

China is currently at the forefront in the digital currency race, having completed several processes to launch its digital yuan. Recently, China began to test its CBDC in four Chinese cities. In the same light, Bank of England has gone far researching CBDC, along with BI.

Bank of Canada, Bank of Japan, among others, also have gone far with research as regards adopting a CBDC. Also, South Korea’s Central Bank is making an effort towards creating a CBDC. However, the country does not have plans yet to launch one.

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Author: Muhaimin Olowoporoku

Muhaimin is a journalist, a fintech and crypto enthusiast who is passionate about its development in Africa and across the globe. Muhaimin derives pleasure in reporting and analysing happenings in the crypto world and a believer in Blockchain technology.