HSBC Helicopter Drop – Blockchain and Central Banks the Future?

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Business Insider has reported that HSBS is discussing the idea that central banks could push for blockchain-based digital currency systems in order to capitalize on transaction transparency and create a clearer picture of a country’s financial system.

According to a draft document European markets editor Mike Bird obtained, UK banking group HSBC has outlined how it believes the blockchain could be used to facilitate or enhance unconventional central bank policies.

Bird writes:

According to a note from HSBC, central banks could use the blockchain for a policy that’s even more unconventional than quantitative easing. It could apparently make “helicopter drops” of money, sent from the central bank to households, much easier. The phrase comes from Nobel-winning economist Milton Friedman, who referred to dropping money out of helicopters decades ago, meaning a direct stimulus from the central bank that didn’t have to go through the private credit system.

Here’s how they think the blockchain could help with that:

If we move towards an economy where all transactions become recorded in real-time on a Blockchain type of technology, it will not be too dissimilar to the current eco-systems that many ecommerce giants have around the globe. Online e-commerce stores are able to give out loans to merchants without collateral, because they know all the flows already from the merchants’ point of view: from how much people are spending to the conversion rate of pages viewed to purchases. In the same way, a modernised monetary transmission system, based on real-time big data analysis through Blockchain, could allow the government to balance the economy more efficiently and systematically.

In short, the blockchain would allow the government to know a huge amount more about what’s actually happening in the economy.

Read full article with graphics here.

 

Richard Kastelein

About Richard Kastelein

Founder, Publisher and Editor in Chief of Blockchain News and co-founder and director at Blockchain Partners in London/Amsterdam/NYC, Richard Kastelein is also an advisor with a number Blockchain startups doing ICOs including DECENT.ch, Inchain, Humaniq, Chronobank, eGaas and others.

He is regarded as one of the top journalists by the Blockchain and fintech communities – as is evident by his entry in the Top 150 Fintech journalists online and in the top 10 of the Blockchain Top 100 List. As a prominent keynote presenter, he has spoken on Blockchain at events in Gdansk, Amsterdam, Minsk, Dubai, Antwerp, Eindhoven etc, where he helped spread the cause for Blockchain technology and crypto-currency and, consequently, has built a notable network inthe scene.

In 2013, the European Commission appointed him as an expert for overseeing financing for emerging startups as a part of the European Commission’s 90 billion euro Horizon 2020 project, created in Brussels to promote innovation as a driving force of job creation and business ventures across Europe. He has also worked as an external expert for Innovate UK since 2012, judging startups for the UK government.

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