Miguel Angel Fernandez Ordoñez, the Governor of the Bank of Spain between 2006 and 2012, was in charge of closing the session on the first day of the “2nd Digital Coin & European Financial System Seville Summit”edition entitled “The Transformation of Money in the Next Decade”.
In relation to the final axis of the first day of the event, “Crypto Literacy”, Miguel Angel explained that in the last year there have been initiatives from both private and public institutions that have rolled documents with which it can be deduced that the transformation of the financial system is an issue that will end up happening.
However, the uncertainty is whether it will be a positive transformation that ends up benefiting all parties or if, on the contrary, it ends up bringing more problems than those that may already exist.
The main issue addressed by the former Governor of the Bank of Spain was the “digital public money” or known by its acronym in English, CBDC (Central Bank Digital Currency) and its confrontation with private money provided by banks.
About, Michelangelo explained that “The central banking community already admits, and it is clear reading the latest annual report of the International Bank for Payments in Basel, that the centerpiece of a reform of the monetary system must be digital public money because it is a safe asset, it is an asset without risk unlike the asset with risk that are bank deposits or other private money possibilities”.
Faced with the stability of the Financial System that provides the income of digital public money as it is an asset without risk, academic central banks are studying which technologies are best suited to reform, privacy designs, among others.
However, and according to his opinion, a factor that is not being studied in relation to this is “the dismantling of bank deposit protections” since, for him “This is an issue that I believe is absolutely irremediable, in no parliament is it going to prove that having stable money we are using the powers of the state” to protect bank deposits.
Fernandez believes it is convenient to carry out a transition process in which a separation of money is carried out.
The second topic that the ex-governor of the Bank of Spain exposed was the well-known stablecoins, which he considers to be different from cryptocurrencies such as Bitcoin (BTC) since, “they are a recognition of the importance of fiat money, stablecoins is the crypto world saying: okay, I’m going to use my technology but I accept that by In the end, what the payment user should have is the right to have public money”
Stablecoins coincide with bank deposits in that just as they can return money, it may happen that, in effect, there is no return. To avoid this, Fernandez says, according to the press release received, that “the stablecoin must have 100% backing of digital money, to guarantee the stability and free competition of the payment system”.
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