Digital currencies for traditional banking
Vitas Vasiliauskas, president of the Board of the Bank of Lithuania, highlighted the importance of digital currencies as a novelty of the central bank.
During the conferenceVasiliauskas pointed out that usually the electronic payment methods are more convenient and efficient than the money issued by a bank:
«The amount of cash in circulation is decreasing in some countries. Someday each person will have to have an account in a private entity just to make payments, ”he said.
Among the possible benefits of digital currencies for central banks, Vasiliauskas mentioned greater efficiency in payments and liquidations of securities.
Likewise, there would also be a benefit in terms of reducing counterparty risk and liquidity.
However, the official mentioned that a greater central bank balance would be necessary to maintain bank reserves.
This is because the technology for issuing digital currencies is still uncertain, so they should carefully evaluate the risks and benefits.
In that sense, he said that “The crucial issue is adherence to money laundering requirements, given the ease with which large amounts can be transferred electronically, how will the standards be applied? That would be a huge burden for central banks ».