Blockchain technology is arguably one of the technologies that benefits almost the entire industry, but Swiss National Bank (SNB) chief economist Carloz Lenz thinks otherwise.
It is understood Lenz believes blockchain is not the best solution for the central bank’s digital currency (CBDC), the digital franc because the technology would override the decentralization feature in the CBDC as an ideal solution.
“It is easier if we imagine having a direct account with Bank Negara. Or we can rely on a fully decentralized solution in the blockchain, where there is no central authority. But, blockchain is inefficient. I don't think a decentralization solution is ideal. "
At the same time, Lenz believes there is no need for the country to establish a digital franc as the current payment system is still functioning well. Lenz is confident that the franc will not face the risk of being ‘replaced’ with other currencies such as the euro if there is no involvement in the CBDC.
In fact, the issue of the adoption of blockchain technology for CBDC is often raised by most financial experts around the world.
For example last year, one of the SNB members, Thomas Moser stressed there was no blockchain requirement for the establishment of the CBDC. But at that time, Switzerland was also studying the benefits of using blockchain in an effort to introduce CBDC.
China on the other hand fully embraces the use of blockchain to facilitate CBDC transactions. In mid -June, the People’s Bank of China successfully conducted digital yuan payroll payments using a blockchain.
