Central banking has served global finance well for several centuries with the Song and the Yuan Dynasties being credited with the development of fiat currencies. Central Banks have as their primary mandate the maintenance of price stability in an economy. This they achieve by managing the money supply in an economy; so as to manage inflation; by regulating the value of the national currency exchange rate vis a vis trading partners; by finance government operations; by being the sole authorized distributor of banknotes, and by being the 'lender of last resort' to commercial banks.
International trade is directly impacted by the efficiencies of national central banks; their rules, relationships, settlement protocols, etc etc. A widespread use of a blockchain digital network, promises that the settlement cycle would be significantly reduced.
Recent views however is that the role of CB's in speeding global trade maybe hitting a limiting barrier (administrative & technological) and there are fears that the present infrastructure may be acting as a retardant to trade.
Hence the serious examinations now taking place with digital currencies, particularly, the leveraging of the features of blockchain technologies.
Recent initiatives of the White House and the Chamber of Digital Commerce has been looking at ways to exploit / leverage blockchain digital distributed ledger technology for the Federal Government. The pace has been intensifying and broadening.
The Bank of Canada is already developing a blockchain-based CADcoin alternative digital currency, backed by real fiat currency reserves.
The Bank of England Governor Mark Carney is cited as indicating that a "central bank digital currency" is a development that could result from its ongoing distributed ledger (blockchain) proof-of-concept process.
Whither national central banking in the new dispensation ? Is a paradigm shift about to occur ? Is national state jurisdictional issues about to be supplanted by global financial efficiency considerations, particularly related to international trade ?
We must learn lession from removal of Mr. Raghurajan, an piercing personality not bowing to existing polity. Please study Raghurajan exit from RBI .
With respect to blockchain, it's worth some time to inspect the recent events in the Ethereum world of The DAO. First a huge crowd-funding success, followed almost immediately by a very damaging 'exploit' - equivalents of 10s of millions of dollars.
Yes. This new issue is country specific. For instance in Nigeria the attempt to control CBN and its policies by politicians continue to affect the economy without minding the CBN Act 2007
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