Central Bankers From Canada, Netherlands, Ukraine Call Blockchain Unnecessary for Digital Fiat

KYIV, UKRAINE - Central bank digital currencies have been a hot topic in blockchain circles recently, but central banks are lukewarm about blockchains.

Representatives of a number of the world's central banks discussed their CBDC projects last week in Kyiv, Ukraine.

The one-day conference was arranged by the National Bank of Ukraine, or NBU, which itself is a CBDC pioneer, having run its own digital currency pilot in 2018.The central bank wanted to test its ideas and conclusions with the banking community and stimulate the discussion, the head of its innovative development department, Roman Hartinger, told CoinDesk.

In 2018, the central bank tested a digital token running on a fork, or modified copy, of the Stellar blockchain.

"The essence of the DLT infrastructure is that no single party should be trusted enough, but don't we just trust a central bank to maintain the integrity of the global ledger?" said Harro Boven, policy advisor in the payments policy department of the Dutch central bank.

Scott Hendry, senior special director of fintech at Bank of Canada, which piloted its Jasper project last year, agreed that "You don't need a DLT to make a central bank digital currency."

Then why even bother to create central bank digital currencies - the concept that initially was pitched as a trusted, government-blessed kind of cryptocurrency? The reason is Facebook's Libra, says Jamiel Sheikh, the CEO of consulting firm Chainhouse.

"Libra was a wake-up call for us. Central banks have been challenged to innovate," Harro Boven said on stage, echoing recent comments by none other than U.S. Federal Reserve chairman Jerome Powell.

Sveriges Riksbank, the central bank of Sweden, which recently announced a pilot for a digital krona, or e-krona, together with consulting firm Accenture, is going to use R3's Corda blockchain.

Segendorf told CoinDesk that the Riksbank will try out the Corda technology not because the central bank has its mind set on a blockchain-based solution - you just need to try different things to learn.