Stanley Jung: CBDCs can prevent the collapse of the global financial system

This week, serious discussions have centered around the future place of digital assets and blockchain technology in the global financial system. As part of the Singapore Fintech Festival, many recognized authorities in the field and representatives of regulatory structures shaping global financial policy expressed their opinions. Stanley Jung, chief technical officer of IBM Blockchain for Financial Services, also did not stand aside.

With many years of experience in the blockchain industry and the financial sector, Jung believes that CBDCs, or central bank-issued digital currencies, are the only way to ensure the reliability of international payment systems today, especially given the crisis of 2008.

Looking back to the crisis of a decade ago, Jung suggests that part of the regulatory system then simply froze due to “a lack of confidence in the delivery and payment mechanisms that were available at that time.” 

Stanley Jung suggested that in order to eliminate this kind of risk in the future, the optimal solution can be found in combining the digital payment systems already available to central banks with blockchain mechanisms for the delivery and payment of all types of goods. 

CBDC fits perfectly into this new global payment system and insures against the situation that led to the “fading of the system” in 2018. A virtual currency that is issued and controlled by a regulator, fairly centralized, is essentially the same traditional national currency only in a digital format.

In relation to a possible digital version of the US dollar, Jung suggested that it could be possible, with the right business and legal approaches, to provide a kind of “replacement currency” for the dollar. In his interview, Stanley Jung supported the call of the head of the IMF, Christine Lagarde to seriously “consider” the issuance of CBDC for the digital economy, sounded a day earlier at the festival.