Cryptocurrency is a kind of digital money that is not just secure but also in most of the cases anonymous thanks to cryptography, a process which converts the information into an uncrackable code that blankets the purchases and transfers.
Bitcoin was the first cryptocurrency which was born in 2009 and is still the widely known around the world. It is no doubt volatile but at the same time is luring people across the globe with the promise of potential huge rewards.
Legislators and central banks have mixed reactions when it comes to cryptocurrency as it poses a threat to the central banking system which can undermine their monetary policies. A few have gone as far as calling it a bubble which will burst in the future and thus has no long-term future.
At the same time, some central banks are advocating to impose regulations to control cryptocurrency because it is foolish to turn a blind eye towards a $245 billion global cryptocurrency market.
Bloomberg has combined the response of central banks of the world about bitcoin; let’s review the responses of different central banks/governments to what they think about the rapidly spreading tech money.
State Bank of Pakistan (SBP) has a clear stance about the inclusion of cryptocurrency in the country i.e. it is not going to do it. The monetary regulator is not considering to legalize the bitcoins in Pakistan.
SBP doesn’t recognize any cryptocurrency. Earlier this year, FBR also launched a crackdown against the bitcoin traders in the country as the investors were allegedly using digital currency to evade taxes.
The investigation of USA’s central bank is still in its early stages and apparently, it is not too excited with the idea of introducing digital currency due to privacy issues. According to Jerome Powell, a board member and the chairman nominee there are still technical issues associated with the technology
Brazil doesn’t think that cryptocurrency poses any immediate threat to the financial system of the country but is alert regarding any changes in the use of digital currencies across the globe.
China is surprisingly open to the idea of digital currency where the central bank will have full control over the cryptocurrency. The authorities believe that digital currencies can help to complete payments efficiently and can enable more control over currencies.
The country has also imposed a complete ban on exchange trading of bitcoin and other cryptocurrencies.
Germany is not a big fan of cryptocurrency and believes that it can disrupt the business model of banks and the monetary policy. It is pertinent to mention that most of the citizens of the country still prefer to pay by cash, a norm which is actually more common in developing nations.
The European central bank is openly against the cryptocurrency and has repeatedly warned against the dangers of investing in it. The central bank believes that digital currency is just a bubble that isn’t here to stay.
France’s Central Bank has advised great caution when it comes to dealing with cryptocurrency due to lack of any public institution to provide any confidence. Also, there are different risks associated with the use of digital money and the country knows it and is thus approaching the subject with heightened alertness.
Japan wants to study the cryptocurrency but currently is not considering any plan to bring this technology to life in the country. It a good move by the central bank to keep in touch with what is happening in terms of digital currency and gain more knowledge about it.
The UK believes that cryptocurrency shows signs of financial revolution which is why the central bank started an accelerator to help the incubate new companies working on this technology.
Bank of England knows that it has to go a long way before they can convert their currency into digital money but it is quite optimistic about the idea and the technology.
India’s stance is just like Pakistan’s i.e. they are not allowed in the country as they can be used for money laundering and financing terrorists.
Canada considers cryptocurrency as an asset that can make the financial system more efficient in the future. The regulatory body doesn’t consider it true form of money and believes it to be a security which should be treated the same way.
South Korea believes that the country needs to do more research and monitoring when it comes to cryptocurrency. The central bank is protecting its citizens and trying to prevent the use of digital currencies in crimes.
Russia is not onboard with legalizing cryptocurrency in the country as it is concerned with the potential risks of digital money. The country is not interested in introducing private money neither in physical nor in virtual form.
Turkish central bank believes that if cryptocurrency is designed well, it can provide financial stability. The country believes that the digital currency can lead to a cashless society that can make payment systems more efficient.
Netherlands is ahead of all countries when it comes to cryptocurrency as the country introduced DNBcoin, its own digital money. It was used for internal circulation only to better understand how the technology works.
The central bank is currently looking at the future demand of the digital currency and is considering the currency issuance and how the digital strategy may fit in all of this. The central bank is also looking into whether it will be feasible to convert and replace the physical currency that is already in circulation with the digital one.
Australia recognizes that the cryptocurrency has the potential to be used widely in the financial sector and other parts of the economy and is thus monitoring the digital currencies very closely.
Scandinavian countries are actually enthusiastic about the cryptocurrency technologies unlike the rest of the world and are looking at different opportunities to explore new and innovative options/features of digital money.
Morocco has rather harsh rules against the use of cryptocurrency as being involved in the exchange of digital money is punishable there by law. The reason behind such stringent policies is apparently because there is no institution to back up the payment system.
Bank for International Settlements
According to Bank for International Settlements, the central banks around the world cannot ignore the growth of digital currencies. It is a separate notion whether every country will issue their own cryptocurrency but they cannot disregard any potential pros of the technology