The report “Central Banks and Distributed Ledger Technology” that was published not that long ago, analyzed in detail the interactions between different central banks and blockchain technology. Particularly, the way the former are experimenting with central bank digital currencies (CBDCs). Ashley Lannquist, a project lead in blockchain and distributed ledger technology at the World Economic Forum and the primary author of the report pointed out that at least 44 different banks are showing extensive interest in the matter. This means they are exploring the potential opportunities and dedicating resources to industry-related research. Their main point of interest is the potential opportunity to issue a digital currency of their own. The results, however, haven’t been as fruitful as expected. Some are promising yet others have pointed the need to increase the level of caution.

At the moment, the banks that are willing to proceed with efforts must deal with all the technical and regulatory issues that might become a constraint. The institutions must make sure that they possess the necessary infrastructure in order for their systems to operate properly, specifically in relation to data privacy. The other matter of concern in policy aspects, such as a central bank’s monetary policy, that can create unintended consequences. Given the prevailing conservative attitudes, it is expected that a few banks will manage to issue their own currencies.

For instance, the National banks of Cambodia is actively incorporating blockchain technology in the national payments system, which is supposed to be complete by the end of the year. The main purposes for such decision were severe underbanking along with the inefficiency of the banking system in place. The new system will provide a more efficient payment and settlement means for Cambodia’s population. The program will be deployed on a large scale and will involve over 10 banks.

Another example refers to France. The Bank of France was among the first ones in the world to exhibit production deployments of Ethereum, substituting the existing system for provisioning and sharing SCIs with a blockchain-based one. This way they were able to optimize operation and ensure improved resource management.

WEF has been putting significant efforts into improving communication among central banks regarding the matter, as many of them have been privately researching the industry for a couple of years now. Those who are new to the field are being connected with experienced teams that help them research blockchain use cases. In other words, blockchain technical community is being connected to the central banks in order to ensure mutual cooperation and facilitate further development. Such collaborative efforts are expected to produce valuable output in the future years.