Central banks are increasingly interested in employing blockchain technologies, and they should be.
- The blockchain threatens the intermediation business.
- Central banks encounter the blockchain in the form of new krypto currencies, and as the technology underlying new clearing and settlement systems.
- Krypto currencies bear the risk of “dollarization,” but in the major currency areas this risk is still small.
- New clearing and settlement systems benefit from central bank participation. But central banks benefit as well; those rejecting the new technology risk undermining the attractiveness of the home currency.