Central banks should consider using digital currencies for cross-border payments to help reduce transaction time and costs, says a report by the Chinese Academy of Social Sciences (CASS) think tank.
Cryptocurrency allows parties to transact directly without a centralized intermediary using blockchain technology, which uses a shared wallet, verifies, records and processes transactions within minutes.
The average transfer time, which is now 3 to 5 days, could be reduced to less than 1 day, and the cost could be reduced to 1 percent or less, compared with the 7.2 percent that is charged on payments now, experts Liu Dongming and Song note Shuang in the CASS report.
“Moreover, as the new system becomes more open, more flexible and more inclusive, all developing countries will have adequate and easy access to these services,” the report said.
The report proposed three types of digital payment systems: one led by the International Monetary Fund (IMF), a second led by some countries, or a third that combines the IMF system with those of some countries. A combined system is said to be the most feasible.
However, developing digital currency payment systems could pose a challenge for cross-border payments that involve a SWIFT code, the report says.
The People's Bank of China is exploring issuing a state-owned digital currency, even as it battles private digital currencies.
Fang Yifei, vice president of the People's Bank of China, recently said China should consider adopting a "two-tier" system for issuing digital currencies, in which both the central bank and financial institutions would become legitimate issuers.
Chinese authorities have taken a number of steps in recent months to curb the cryptocurrency trading market, including closing exchanges and banning ICOs.
On Monday, Financial News, a company run by the People's Bank of China, said Monday that the People's Bank of China will monitor foreign websites of virtual trading platforms to combat risks caused by a flood of investment following the ban. ICO.
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According to https://www.reuters.com
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