Commonwealth central bank governors say they want to look more closely into the impact of digital currencies on monetary policy before adopting a stance toward the technology.
The comments came earlier this week during a meeting of about 30 central bank governors from the Commonwealth – an intergovernmental organization composed of 53 member-states. Held on 6th October and chaired by Bangladesh Central Bank governor Aitur Rahman, the event centered on bitcoin in the context of global remittances.
Government ministers and other officials were also in attendance.
The topic of digital currencies and cross-border payments served as part of a broader conversation about the negative impact of regulation on remittances, particularly the closure of accounts for money-related businesses that banks deem too risky to work with.
Many startups working in the digital currency industry today, even in countries with more advanced understandings of the technology like Australia and the US, continue to struggle to gain access to even basic banking services.
The meeting was intended to look at “the potential of virtual currencies to decrease costs and improve the efficiency of transfers” and included a presentation by London School of Economics historian and CoinDesk contributor Garrick Hileman on the state of digital currencies.
While the potential for digital currencies to address remittance pain points was acknowledged by those in attendance, some governors at the meeting raised questions “about the implications for monetary policy and financial stability”, according to the Commonwealth Secretariat.
Jwala Rambarran, central bank governor for Trinidad and Tobago was quoted by the Commonwealth Secretariat as saying:
“The Commonwealth Secretariat has a key role to play in sharing knowledge and developing research on the potential and implications of this new technology. If we decide to regulate virtual currencies, we are unaware of the financial instability risks posed by this currency. This is an area we need to determine carefully.”
During the meeting, representatives also discussed best practices for describing the technology.
Hileman characterized the meeting as a positive one, telling CoinDesk:
“There was significant interest shown by many Commonwealth member countries in the potential of cryptocurrencies to have a positive impact on reducing costs and other inefficiencies in traditional remittance services.”
Commonwealth flags image via Shutterstock.