May the best win ! – The central bank digital currency (MNBC) is one of those highly political subjects. Using the best of blockchain technology, they are both a decentralization tenant’s nightmare and a save banker’s dream. Multiple experiments are underway on all continents, and we talk to you about them regularly in our columns. In a recent study, the European Central Bank (ECB) compared cross-border payment systems to determine the best. And guess which one is favored by the banking institution. Answer to follow!
A comparative study with almost no preconceptions
The ECB started from a simple observation shared by the members of the G20 regarding the cross-border payments. Boosted by European integration and globalisation, fiduciary exchanges have exploded in recent years and will continue to increase.
At the same time, the precise report that the costs related to these operations remain raised, despite the undeniable technical progress linked to digitization which should have led to a decline. The ECB thus asserts that after “1,000 years of research, the Holy Grail of cross-border payments can be found in the next ten years” ; hence the purpose of this study.
The objective for these professionals of the economy is to find a system ” very fast, cheap, universally accessible and as secure as central bank money”. Armed with these search criteria, Ulrich Bindseil and George Pantelopoulos therefore compared 5 systems existing payment:
- the current banking network and its possible modernized version ;
- The solutions offered by startups of the fintechsuch as PayPal, Wise, Western Union or Revolut;
- The stablecoins private of the Libra, Tether or Dai type;
- Scaling a Model Payment System Globally SEPA ;
- Finally, the network Bitcoin.
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MNBCs win hands down against Bitcoin
The impartial professionals of the ECB passed each of the candidates under “Holy Grail of Payments” according to their requirements. The actual and potential efficiency, the energy consumption of its architecture or its competitiveness on the market are part of the criteria. But there is one last, and not least. it’s about the “preservation of monetary sovereignty”. Finally, in an unbearable suspense, the results of the analysis come out. Those are the MNBC who wins the game.
The report of course examines each system, but we are particularly interested in Bitcoin ! The king of cryptos takes it for his rank. It is considered too slow and incapable of scaling up, although the study does not address any evolution of the type Taproot we Lightning Network. And his slowness combined with its to avoid strongly disturb.
“Since settlement in the Bitcoin network only occurs every 10 minutes or so, the effects of recalling are already felt at the time of settlement, which complicates payments. »
Finally, “the underlying technology, especially proof of work, is overly offloaded and unnecessary”. Here’s your favorite personalized crypto for winter. But to all lord, all honor. Now for the big winner: the MNBC ! On what arguments are they designated “Holy Grail of Payments cross-border » ? First, they are better suited to currency conversions. Second, they are most effective for instant exchanges between central banks. Finally, they are the only ones to guarantee a sovereignty monetary to issuers. CQFD!
With such criteria, it is not really surprising that Bitcoin be considered as a wrong solution. The Knights of the Round Table in Brussels have therefore found their miracle solution, while at the same time, other countries abandon it. But, apparently, we Europeans are doomed to drink the chalice to the dregs.
Central banks are sticking to their digital currency plans. You probably prefer to worry about a bit more restless asset like Bitcoin! To not miss the opportunity of a lifetime, register without delay on the FTX reference crypto exchange platform. In addition, you benefit from a lifetime reduction on your trading fees (commercial link, see conditions on official website).