The Dutch Central Bank (DNB) thinks the eurosystem’s central bank digital currency (CBDC) should be more programmable than bitcoin.
Saying on Tuesday that cryptocurrencies offer some technological lessons for the banks they seek to displace, DNB wrote that smart contracts could help “future proof” CBDCs. The 45-page CBDC report is the Netherlands’ pitch to become a digital currency proving ground for the eurosystem.
“A smart contract system with complex logic potentially increases the demand for CBDC and offers opportunities to reduce transaction costs,” DNB said. “In this way it could contribute to diversity and innovation in the payment market.”
The striking admission comes as the DNB jockeys for influence in European central bankers’ growing digital currency debate. Just last month the French seized that discussion with an open call for limited CBDC experiments. The Netherlands, which does not have its own active experiment just yet, went a step further in the report: DNB wants to be a research, development and deployment hub for a European CBDC.
“If the decision should be taken within the eurosystem to experiment with some more concrete type of CBDC, we are ready to play a leading role. The Netherlands provides a suitable testing ground for such an experiment,” DNB said.
Rise of private cash
That appears to be an imperative for the Dutch, whose 17 million residents are the least likely in the eurozone to pay for goods or services with cash, according to a 2017 European Union report. Three years later Holland’s cash aversion has only come into stronger focus: there are fewer ATMs and fewer cash withdrawals each year. On a macro scale, “private digital money” use – private money being funds tied to a commercial bank account – is growing and Libra, though neutered, is still a threat.
Responding as well to what it said was its own citizens’ growing interest in CBDC, the DNB said digital currency could help ensure that public money…