Opinion: June 2, 2021. Will Central Banks Issue Cryptocurrencies?

The short answer to the question is yes. What it gets more complicated is how and what type of currency will they use. Central banks are currently under an existential threat, the existence of decentralized, supply-limited digital assets.

As it remains an issue of power, a central bank will create a cryptocurrency which will be pegged to the value of the national currency (just as like current stablecoins). It will most likely allow decentralized transactions as current cryptocurrencies allow, however, they will control supply in a centralized way, just as they do nowadays. Since the central bank will be in charge of the blockchain, they will know the details of the transactions.

In order for a system like this to be successful for the central bank, they will most likely create incentives for its usage. They could also make it the preferred way of paying or refunding taxes. Without the people using them, a central bank issued cryptocurrency would not be a success for the central bank.

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