Central Bank Says CBDC Could Learn From Bitcoin, Rejects Decentralization

The move from fiat currencies to new central bank digital currencies appears to be gaining traction, as one of Europe’s biggest central banks admitted that (unspecified) parts of Bitcoin’s underlying technology could be used in creating a new type of currency.

The paper, which was written by the Dutch National Bank (DNB) and titled Digital Central Bank Money: Objectives, Preconditions, and Design Choices, explores how a “future proof” digital currency in the Eurozone could look like.

Among other things, the paper discusses ways that a currency based on “a smart contract system” may lower transaction costs, and thus potentially increase the demand for the government-issued currency. The central bank noted that “specific technologies previously pioneered for some cryptos” could be of use for a future CBDC in order to achieve these goals. However, the bank did not specify what it liked about the “pioneers.”

In the paper, the DNB…