Dutch Central Bank Plans to Experiment with a Blockchain-based Currency

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AMSTERDAM - Reportage bij De Nederlandse Bank, DNB. foto: tekst DNB. ANP XTRA LEX VAN LIESHOUT

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Buried deep in a report from the Dutch Central Bank (DNB) issued today they aim to develop a working prototype called DNBcoin based on Blockchain technology.

c. Door een concreet prototype DNBcoin gebaseerd op de blockchaintechnologie te ontwikkelen.

According to a Linkedin post from Simon Lelieveldt it was buried deep on page 208 under the header of inclusion and accessibility of payments in the sustainability-part of the report. 

It’s been less than two weeks since the Bank of England announced a similar project they are calling RScoin

Lelieveldt writes more:

So is this new and revolutionary?

No and yes.

No, because I recall that twenty years earlier, the Danish central bank sold its electronic cash solution (Danmont) to the market (withdrawn as a micropayment tool in 2005), as did the Canadian central bank (selling of its Mintchip). So there is not much news in central banks setting up electronic cash.

What is new however is the environment in which this development occurs. Previously, central banks were keen on getting rid of cash as an inefficient payment method. As this starts to be succesfull (in Sweden and the Netherlands for example) the central banks adapt their position. The policy line now is that for availability and financial inclusion reasons cash still needs to be around as a payment mechanism.

So when we now see central banks moving forward in the electronic cash domain (now conveniently labelled: blockchain/fintech) it might be to no longer spin it off to the market, but to create a permanent digital replacement of cash. Therefore, this time it might be different.

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