The Danish central bank is considering the use of blockchain or a blockchain variety to provide basis for a digital currency, the e-krone. Less than 20 % of all transactions are performed using cash and Lars Rohde (Chairman of the Board of Governors of Danmarks Nationalbank) states that cash no longer provides a safety net if the e-payment system were to collapse. Hence, the central bank is considering the use of a digital currency to reduce transaction costs, especially on small and micro transactions there is a lot to save. However, there are still many questions that must be analyzed before steps towards development can begin.
Two of the larger issues that remain are the degree of surveillance that follows the implementation of a distributed ledger technology and the role of the central bank during a possible crisis. If implemented the central bank could potentially be handling knowledge of all transactions in Denmark. This is a politically tender subject as populations are growing increasingly distrustful on surveillance by corporations and governments. Finally, in the event of a financial crisis, all money would end up in the central bank, making it a de-facto creditor to all banks, this was not the plan of the post 2008 crisis regulatory overhaul.
Lars Rohde states that they are looking into some of these dilemmas. If Denmark were to experiment with a digital currency they would follow the lines of digital currency frontrunners such as Britain, Canada and Sweden.
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