The Central Bank Of Azerbaijan Doesn’t Plan On Issuing Its Own Cryptocurrency

Nov 16, 2018 at 21:00 Update Date :Nov 16, 2018 at 21:00 UTC

As reported by AzerNews on 15th November, The Central Bank of Azerbaijan (CBA) avoids issuing its own state-backed cryptocurrency because according to them, it involves “great risks”.

The first chairman of the CBA has taken the above-stated decision because he thinks that digital currency “comes with great risks”. He says that the Central Bank doesn’t plan on launching its own Central Bank Issued Digital Currency (CBDC) anytime soon. The CBA chairman terms instruments like bitcoin, basically cryptocurrency as “risky and dangerous” and believes that these are only meant for the purpose of money laundering.

It was reported on 7th November about an independent Israeli study group which works under the Governor of Israel. The group did an avid research on whether or not it’s risky to issue cryptocurrency by a country’s bank and came to the conclusion that the country’s central bank should not issue its own token. Atleast that’s what is recommended.

Further, it was reported that the Bank of Finland researched on the same topic as well and released a study named “The Great Illusion Of Cryptocurrencies.” As the name of the study suggests, the term used in the title itself is “illusion” which clearly means that according to the banks research cryptocurrency isn’t real but just an illusion. Moreover, the bank terms cryptocurrencies as “accounting system for non-existing assets.”

Contrary to the decision made by the Bank of Azerbaijan, the chairman of the Azerbaijan Internet  Forum reveals governments’ plan to implement Blockchain Technology and Smart contacts in the countries legal system and “in the field of public utilities (water, gas and electricity supply”, as reported on 2nd November.

The two contrasting decisions in the same country is a topic for everyone to be all ears. State-backed cryptocurrency is a controversial topic involving conflicting decisions.

While the CBA chairman terms cryptocurrencies as “risky”, the IMF Chair Christine Lagarde speaks about how central banks of every country should consider issuing their own cryptocurrency, in a Singapore Fintech festival. Lagarde says that the issuance of CBDCs will eventually increase payment security and reduce the stress implied on the financial system. This will happen by decreasing the risk of bank runs and even provide financial help to the areas not having enough privileges that are untouched by the existing financial infrastructure of the country.

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