March 9, 2020 Central bank experts concerned that central banks are not adequately vetting DLT solutions.

At an MIT Bitcoin Expo this past weekend, three members and former members of the Federal Reserve Bank of Boston, IMF, and Bank of England discussed the tradeoffs between using distributed ledger (DLT) technology and centralized alternatives for central bank digital currencies (CBDCs). Despite lauding the superior efficiency of certain blockchain solutions, the experts identified interoperability and privacy as general issues that DLT solutions have yet to address while highlighting the low throughput, apparent lack of security and asset volatility of networks such as Bitcoin, all of which are apparently unsuitable for CBDCs. The panel also expressed their concerns that some central banks are not performing sufficient technical due diligence on potential DLT solutions, in part out of an incapacity to fully evaluate either specific implementations or the service providers bidding for contracts.