Dutch Central Bank Wants to Be European Union's CBDC Proving Ground

Published on by Coindesk | Published on

Apr 21, 2020 at 19:16 UTCUpdated Apr 21, 2020 at 19:49 UTC.The Dutch Central Bank cited its nation's declining use of physical cash as one of the reasons it may do well with a CBDC trial.

The Dutch Central Bank thinks the eurosystem's central bank digital currency should be more programmable than bitcoin.

The 45-page CBDC report is the Netherlands' pitch to become a digital currency proving ground for the eurosystem.

"A smart contract system with complex logic potentially increases the demand for CBDC and offers opportunities to reduce transaction costs," DNB said.

The striking admission comes as the DNB jockeys for influence in European central bankers' growing digital currency debate.

The Netherlands, which does not have its own active experiment just yet, went a step further in the report: DNB wants to be a research, development and deployment hub for a European CBDC."If the decision should be taken within the eurosystem to experiment with some more concrete type of CBDC, we are ready to play a leading role. The Netherlands provides a suitable testing ground for such an experiment," DNB said.

The report offers a detailed look at what a "Reasonable" eurozone CBDC could be and compares the choices against some monetary benchmarks: Libra, bitcoin, cash, commercial bank money and central bank reserves.

DNB therefore said that a CBDC should offer a selective degree of privacy second only to wholly anonymous cash.

Those technical aspects and more build out DNB's uncannily detailed envisioning of CBDC. Coming also with DNB's emphatic call for CBDC to shore up the public money system as the world continues to change, it amounts to a striking endorsement of CBDC - perhaps, as the Dutch Finance Minister Wopke Hoekstra told parliament Tuesday, the loudest in Europe so far.

"In no other euro area has the central bank so clearly expressed a positive attitude towards digital central bank money aimed at the general public," Hoekstra said.