The Covid-19 crisis has resulted in a blessing in disguise for the central banks who sought the digitalization of the global monetary system since 1983. While the need for digital currency has increased amidst coronavirus pandemic, the dramatic fall in the global economic outlook can result in to a serious crisis that can lead the world economy to a great depression if global lockdown continued, said a geopolitical analyst Mr. Sabtain Ahmad Dar.
Bank of International Settlements (BIS), which is the central bank of the central banks of the global nation-state system, is responsible for global monetary regulation and banking supervision of the global monetary system. On 24 January 2020, amidst Covid-19 crisis, it was reported that an annual study carried out by the BIS asked 66 major central banks if they were working on (Central Bank Digital Currency) CBDCs and, if so, what type and how far along they were. The report found 80 percent of the 66 banks surveyed were engaged in some form of work surrounding CBDCs, with nearly 40 percent having moved to experiments and developing proofs of concept.
Federal Reserve Of United States (FED) said the Fed is “conducting research and experimentation related to distributed ledger technologies and their potential use case for digital currencies, including the potential for a CBDC”. Bank of England said that they will meet with the Bank of Japan, the European Central Bank (ECB), the Sveriges Riksbank, the Bank of Canada, the Swiss National Bank and the Bank for International Settlements (BIS) to pool research and experiences of the potential for a central bank digital currency (CBDC).
Even Banks like the European Central Bank (ECB), Central Bank Of Brazil (CBB), Bank Of Japan (BOJ), People’s Bank Of China (PBC) have shown a positive approach towards CBDC. In fact, the Russian central bank is the only one who has shown mixed remarks over full digitalization of its monetary system. While Reserve Bank of India (RBI) seriously is thinking about CBDC, still, the RBI’s stance on the ban of private cryptocurrency still remains the same.