The central banks of the G20 countries should set up a blockchain consortium to study the technology, investigating areas such as the creation of digital national fiat currencies, says a report from the Centre for International Governance Innovation (Cigi).
With Germany making digital technology and its influence on areas such as financial services a key plank of its G20 presidency, Cigi is urging a focus on blockchain technologies, which "hold the key to building an inclusive global digital economy that is auditably secure and transparently accountable to the world’s citizens".
The centre makes four proposals, including a call for the constitution of a central banks blockchain consortium to study the monetary and fiscal policy implications of the rise of the technology and cryptocurrencies.
With many central banks - including the Bank of China, Bundesbank, Bank of England and US Fed - already carrying out their own research in the area, Cigi says resources should be pooled, with the various countries bringing together their experts in economics, cryptography, law and other fields.
Specifically, the research should look at the possible creation of blockchain-based national fiat currencies and whether these are desirable; the coexistence of fiat and non-fiat cryptocurrencies such as Bitcoin; and whether public blockchain-based prediction markets experiments can be used to improve the design of monetary policies and global reserve currency arrangements.
The report also suggests investigating whether some existing international regulatory regimes - such as the Basel and WTO agreements - can be made more efficient, transparent and accountable by migrating to blockchain-based systems.
Another idea floated by Cigi is the creation of a global regulatory sandbox for the most promising blockchain use cases, enabling testing of services while addressing cross-border regulatory concerns.
Finally, the G20 should partner with other transnational legal and regulatory bodies - such as the International Standards Organization, the International Law Association and the Financial Action Task Force - working on blockchain-related issues.
Says Cigi: "The G20 must act now to exercise innovative leadership and engage in thoughtful experimentation. It must commit to developing appropriate multi-stakeholder initiatives that leverage blockchains’ strengths and foster a more inclusive, open, and accountable global economy for all."