Central Bank System More Efficient Than Blockchain, says Bank of Canada
According to local reports during the 2018 G20 Global Financial Stability Conference held in Seoul, South Korea, a lot of concerns and discussions have undergone regarding the future of currencies, banking and economies.
James Chapman, Senior Research Director at BoC Funds Management and Banking Department, raised questions regarding the security and effectiveness of blockchain and cryptocurrency. He called cryptocurrency assets as “a new opportunity and a threat to the financial market.”
While discussing BoC’s Project Jasper, a proof-of-concept payment system which includes DLT (distributed Ledger Technology”, which also inculcates blockchain as a type.
Speaking with the local media, he said, “Digital currencies based on smart contracts have high resilience and eliminate information asymmetry.”
While Project Jasper continues to be in its third testing phase since February, the BoC still has a lot of things to decide about blockchain technology.
“We have to worry about the finality of the settlement,” and continued to state that, “At this time, there is no cost-saving effect compared to the existing central bank system. Hacking and other operational risks are likely to occur.”
Ripple, a startup that develops and installs blockchain-based alternative settlement system for banks, said that its system “is not a distributed ledger.” Senior Vice-President of Ripple Customer Success, Marcus Treacher, also suggested that “you can’t put the whole world on blockchain.”