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5/14/2018, 8:24 PM (Source: TeleTrader)
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ECB's Coeure: Digital money to cut costs, risks

Benoit Coeure, member of the Executive Board of the European Central Bank, said distributed ledgers show promising applications in wholesale payment systems, but that in retail the conventional solutions are still more convenient, efficient, reliable and trustworthy. Speaking on Monday in Geneva about the potential for monetary systems and balance sheets, he claimed cryptocurrency technology is "still immature, costly to maintain and possibly prone to vulnerabilities."

Central bank digital tokens would "save" operational risks and costs in individual central bank accounts for millions of households and companies, but risks of leaving the public sector exposed to private payment systems mean "Bitcoin is bad money and a poor payment system," the policymaker stressed. However, he acknowledged blockchain shares the anonymity trait with cash.

"In an environment of excess liquidity and new regulatory requirements for financial market participants, broadening access to the liability side of central banks' balance sheets to parties other than banks may help better align financial conditions with the central bank’s intended stance," the central banker added.

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