Along with Financial Times Alphaville reporters, skeptics of blockchain and CBDC abound in central banks and among the long term denizens of investment banks. They can foretell the future. If someone had ever tried to talk to them about the internet back in the late nineties, they would have dismissed them with a curt wave of their hand. Of the protectors of the realm are the IT departments as well.
Their well earned stripes and their positions come from having toiled in IT Operations over the years. They defend the processes that they have setup over the years, including the so called Business Continuity Plans (BCP). Of course all of these BCPs were upended in a week in March 2020 in the US. On premises hardware, proscriptions against using home computers, working from home and other shibboleths were quickly abandoned.
The Bank of International settlements did a survey of central banks and published it in January 2019, “Proceeding with caution – a survey on central bank digital currency”. The title reflects the conservatism of central banks and the prevailing mood, two years ago, when everyone had a lot of time on their hands to reconsider and reflect on change. Banks were making a lot of money, the central banks were finally coming out of the long shadow of the 2008 crisis; which commercial banks had inflicted with financial engineering run amok.
The central banks had plenty to do with promoting this irrational exuberance. Of course, in many capitals of finance and central banks this resulted in a reflexive withdrawal into familiar tropes like austerity. The economies that did well were the ones with loose economic policy. When economic death is on the way, austerity should have died a natural death, however this vampire is still alive. Moreover, the looser policies unleashed by the pandemic bought up the assets held by the 1%, similar to the scene in 2008.
