Central Banks Could Turn to Cryptocurrency to Support Reserves

Pioneer Cryptocurrency Nick Szabo said central banks could soon turn to cryptocurrencies to increase their reserves, financial janitors announced on January 9.

Szabo is an experienced cryptographer who has developed the concept of "BitGold" - unprecedented digital and pre-Bitcoin (BTC), focused on privacy in 1998. He is also the first maker of smart deals in 1996 - far ahead of his presence in the industry - and remains one of the leading thinkers of the crypto ball.

In his talk after speaking at the Israeli Bitcoin Summit on Tuesday in Tel Aviv University, Szabo said that in 2019, in the context of growing global geopolitical uncertainty, cryptocurrency is increasingly considered as a reasonable alternative to reserve reserves of the central bank, arguing:

"There are cases where the central bank can not trust the foreign central bank or the government with its obligations, for example, one solution developed to require the Swiss government to reserve it for you - this is not a solution minimised by the trust. is under political pressure and a less reliable solution is, therefore, a cryptocurrency. "

Central Bank reserves - which may be shared in domestic or foreign fiduciary currencies or other international reserves, such as SDRs, government bonds or corporate components of the existing financial system, are used to: address the economic risks and the impact on the monetary policy.

Szabo specifically isolated physical gold as a vulnerable, citing the historical precedent of the Nazi plunder of gold reserves in Europe, beginning in Austria in 1938.

Szabo also predicted that adoption of the crypt would increase in countries where economic mismanagement accelerates devaluation of national currencies and inflation, as well as in politically marginalized countries and under pressure from international sanctions.

Given the current state of technology development in the cryptographic sector, Szabo predicts that 2019 will introduce more and more adoption of a second layer solution such as the Lightning Network.

According to cointelegraph's Cointelegrafa on the spot, Szabo's remarks were prompted by introductory speeches that shed the split, Avi Simhon, president of the Israeli National Economic Council and senior economic advisor to the country's prime minister.

As published on Tuesday, the economist opened Bitcoin Summit in Israel, condemning Bitcoin as inherently ineffective and predicting the disappearance of cryptocurrency.


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