BIG TECH, NOT CRYPTOCURRENCY, IS THE REAL THREAT TO CENTRAL BANKS AUTONOMY, DANISH CENTRAL BANK GOVERNOR SAYS

The rise of digital currencies has sparked intense debate about the future of finance, and whether central banks can maintain their control in an increasingly decentralized world. La Danimarca stata uno dei primi paesi a esplorare la possibilit di una central bank digital currency, o CBDC. La Danmarks Nationalbank ha scartato l idea in seguito a uno studio della durata di un anno tra il 2025 e il 2025, concludendo che una soluzione CBDC non porterebbe grandi miglioramenti all attuale infrastruttura finanziariaWhile cryptocurrency often takes center stage in these discussions, one prominent voice is suggesting a different threat altogether. Cyber Resilience of the Central Bank Digital Currency Ecosystem, (USA: International Monetary Fund, 2025) accessed J. Over 100 central banks around the globe are exploring central bank digital currencies (CBDCs) to modernize payment systems.Lars Rohde, the governor of Denmark's central bank, Danmarks Nationalbank, argues that the real challenge to central bank autonomy doesn't come from Bitcoin or Ethereum, but from the potential encroachment of big technology companies into the realm of currency and payment systems. introducing a CBDC 20% of central banks (mostly in emerging markets) indicate they are likely to launch one within the next six years (Figure 1). Figure 1. Likelihood of Central Banks Issuing a CBDC Source: BIS survey. Note: Likelihood of a general purpose CBDC. With international variations in central bank legalRohde suggests cryptocurrency, currently, is a speculative asset at best, almost negligible. Denmark's central bank governor Lars Rohde says that he can be tempted to ignore cryptocurrency, stating that it is not a threat to the central bank at present. However, he pointed out that theHowever, if tech giants gain control over transaction means, that is when central banks could see a true challenge to their authority.

This perspective challenges the common narrative that paints cryptocurrency as the primary disruptor of traditional finance. The crypto industry s deepening ties to banks and asset managers will pose a risk to financial stability, the European Central Bank has warned, in the latest sign of how central banks andRohde's argument invites us to consider the immense power and reach of tech giants and their capacity to reshape financial landscapes.This is especially pertinent as over 100 central banks are actively exploring Central Bank Digital Currencies (CBDCs) to modernize their existing payment systems.But can CBDCs compete with the innovative payment solutions that big tech might introduce?Or will the traditional monetary system find itself increasingly at the mercy of Silicon Valley? 3.8K subscribers in the AllThingsCrypto community. A sub to discuss cryptocurrnecy. Big tech, not cryptocurrency, is the real threat to central banks autonomy, Danish central bank governor saysThis article explores the nuances of this potential shift, examining the concerns surrounding big tech's role in finance and the evolving strategies central banks are deploying to maintain their relevance and control.

The Diminishing Threat of Cryptocurrency: A Governor's Perspective

Lars Rohde isn't alone in his skepticism towards cryptocurrency as a systemic risk.Several central banks echo his sentiments, viewing crypto as a speculative asset with limited impact on the broader economy.This perspective often stems from the relatively small size of the crypto market compared to traditional financial markets, and the perceived volatility and lack of inherent value associated with many cryptocurrencies.

• Volatility: Cryptocurrencies are known for their wild price swings, making them unsuitable as a stable store of value or a reliable medium of exchange.
• Limited Adoption: Despite growing awareness, cryptocurrency adoption remains relatively low compared to traditional payment methods.
• Regulatory Uncertainty: The lack of clear and consistent regulations surrounding cryptocurrency creates uncertainty and hinders widespread adoption.

Rohde himself admits he could be tempted to ignore cryptocurrency altogether.However, this doesn’t mean he sees no risks in the digital landscape.Instead, his focus shifts towards a different, potentially more potent, source of disruption.

Big Tech's Incursion into Finance: A Looming Shadow

The real threat, according to Rohde, lies in the potential for big tech companies to enter the currency and transaction space. Denmark's central bank governor Lars Rohde says that he can be tempted to ignore cryptocurrency, stating that it is not a threat to the central bank at present. However, he pointed out that the real threat could come from big technology companies invading the currency area or the transaction means.These companies possess several advantages that could allow them to rapidly gain market share and challenge the dominance of central banks:

• Vast User Base: Tech giants like Google, Amazon, and Facebook have billions of users worldwide, providing them with a massive built-in customer base.
• Technological Expertise: These companies are at the forefront of technological innovation, with the resources and talent to develop cutting-edge payment solutions.
• Data and Analytics: Big tech companies possess vast amounts of data on consumer behavior, allowing them to personalize financial services and tailor products to individual needs.
• Global Reach: Many tech giants operate globally, enabling them to offer seamless cross-border payments and financial services.

If a tech giant were to introduce a widely adopted digital currency or payment system, it could effectively circumvent traditional banking channels and reduce the influence of central banks. Crypto trading volumes continue to increase, but several countries central banks are keen to ignore it, with Denmark being the latest to join the crypto is negligible narrative. LarsThis scenario raises concerns about:

• Monetary Policy Control: Central banks could lose their ability to influence interest rates and manage inflation if a significant portion of transactions occur outside their control.
• Financial Stability: The failure of a large tech-backed payment system could have systemic consequences for the financial system.
• Data Privacy: Concerns about the collection and use of personal data by tech giants in the financial sphere could erode trust and raise ethical questions.

Examples of Big Tech's Financial Forays

We are already seeing examples of big tech companies venturing into the financial services sector:

• Apple Pay and Google Pay: These mobile payment platforms have become increasingly popular, allowing users to make purchases with their smartphones and smartwatches.
• Amazon Lending: Amazon provides loans to small businesses selling on its platform.
• Facebook's Diem (formerly Libra): Although the Diem project ultimately failed, it demonstrated Facebook's ambition to create a global digital currency.

Central Banks' Response: The Rise of CBDCs

In response to the potential challenges posed by both cryptocurrency and big tech, central banks around the world are actively exploring the development and implementation of Central Bank Digital Currencies (CBDCs). Big tech, not cryptocurrency, is the real threat to central banks autonomy, Danish central bank governor says. If tech giants get a hold on the means of transaction, then that could be a realA CBDC is a digital form of a country's fiat currency, issued and backed by the central bank.

CBDCs offer several potential benefits:

• Improved Payment Efficiency: CBDCs could streamline payment processes, reducing transaction costs and settlement times.
• Financial Inclusion: CBDCs could provide access to financial services for underserved populations who lack access to traditional banking.
• Reduced Risk: CBDCs, being backed by the central bank, are considered less risky than commercial bank deposits or cryptocurrencies.
• Monetary Policy Implementation: CBDCs could give central banks new tools to implement monetary policy more effectively.

Over 100 central banks are currently exploring CBDCs, with some, primarily in emerging markets, indicating a likely launch within the next six years.Denmark, however, after conducting a year-long study, concluded that a CBDC would not significantly improve their current financial infrastructure.

Challenges and Considerations for CBDCs

While CBDCs offer numerous potential advantages, their implementation also presents significant challenges:

• Cybersecurity: CBDCs are vulnerable to cyberattacks and require robust security measures to protect against fraud and theft.
• Privacy Concerns: The collection and use of personal data associated with CBDC transactions raise privacy concerns.
• Disintermediation: CBDCs could disintermediate commercial banks, potentially reducing their role in the financial system.
• Technological Complexity: Developing and implementing a secure and efficient CBDC requires significant technological expertise and investment.

The Soul of Money: Trust and the Future of Central Banks

Ultimately, the future of central banks hinges on their ability to maintain trust. Central bank digital currencies could disrupt their industry significantly. New forms of digital currencies promise to be easy and cheap to hold and exchange. That gives them potential toAs technology transforms the financial landscape, central banks must adapt and innovate to remain relevant and credible.

The Danish central bank governor's perspective emphasizes that the threat to central bank autonomy is not solely about technology, but about the control of the means of transaction.If tech giants gain a foothold in this area, they could potentially erode the influence of central banks over monetary policy and financial stability.

However, the question isn't just about power and control.It also encompasses the fundamental nature of money and the role of trust in the financial system.Central banks have historically been the institutions that inspire the most trust.They represent stability and security, backed by the full faith and credit of the government.

The challenge for central banks is to adapt to the digital age while preserving this essential element of trust. Die ablehnende Haltung der Zentralbank gegen ber Kryptow hrungen scheint sich derweil noch nicht im Rest des Landes herumgesprochen zu haben, denn die d nische Saxo Bank hat erst in dieser Woche ein neues Krypto-Finanzprodukt angek ndigt, ber das auch Anleger aus dem Mittleren Osten und Nordafrika mit kleinen Summen Bitcoin, Ethereum undWhether they can successfully navigate this transformation will determine their future role in the global financial system.

Maintaining Autonomy in a Digital Age: Strategies for Central Banks

So, what can central banks do to navigate this evolving landscape and maintain their autonomy?

1. Embrace Innovation: Central banks need to embrace technological innovation and explore new ways to deliver financial services. The key difference to popular digital means of payment is that central-bank money whether it s cash or a figure on a screen is ostensibly risk-free while commercial bank deposits aren t.This includes investing in research and development, experimenting with new technologies like blockchain, and collaborating with fintech companies.
2. Develop Robust Regulatory Frameworks: Central banks must develop clear and consistent regulatory frameworks for digital currencies and payment systems. 仮想通貨の取引高は増え続けているが、デンマーク中央銀行のラース・ロード総裁は、仮想通貨の台頭は深刻な経済的脅威にはならないと考えている。 「私はそれを無視したくなるだろう」と、ロード氏はブルームバーグThese frameworks should address issues such as consumer protection, data privacy, and cybersecurity.
3. Promote Financial Literacy: Central banks should promote financial literacy and educate the public about the risks and opportunities associated with digital currencies and payment systems.This will help consumers make informed decisions and protect themselves from fraud.
4. Strengthen International Cooperation: Central banks need to strengthen international cooperation to address the global challenges posed by digital currencies and payment systems. Central bank digital currencies (CBDCs) are a kind of digital money issued by a central bank, but are not cryptocurrency and would not replace cash. CBDCs offer potential benefits for financial inclusion, but there are concerns that need to be considered, as the World Economic Forum s Digital Currency Governance Consortium White Paper SeriesThis includes collaborating on regulatory standards, sharing information about cyber threats, and coordinating monetary policy.
5. Enhance Cybersecurity: Investing in robust cybersecurity measures is critical to protecting CBDCs and other digital payment systems from cyberattacks. With a future U.S. CBDC, the public could use another form of central bank money other than physical cash and digital balances held in individual or corporate bank accounts. The United StatesThis includes implementing multi-factor authentication, encrypting data, and regularly testing security systems.

The Road Ahead: Collaboration and Competition in the Digital Finance Ecosystem

The future of finance will likely involve a combination of collaboration and competition between central banks, big tech companies, and other players in the digital ecosystem.Central banks can benefit from collaborating with tech companies to leverage their expertise in areas such as technology and data analytics. In 2025, Florida Governor Ron DeSantis vowed to similarly nix central bank digital currencies, echoing a long line of Republican candidates who denounce cryptocurrencies that are centrallyHowever, they must also be prepared to compete with these companies to maintain their relevance and control.

The key will be for central banks to focus on their core strengths: maintaining trust, ensuring financial stability, and promoting economic growth.By adapting to the digital age and embracing innovation, central banks can continue to play a vital role in the global financial system.

Conclusion: Navigating the Shifting Sands of Financial Power

The Danish central bank governor's warning highlights a crucial point: the future of central bank autonomy is not just about combating cryptocurrency, but about anticipating and managing the potential impact of big tech on the financial system.While cryptocurrency might present immediate challenges, the vast resources, established user bases, and innovative capabilities of tech giants pose a more significant long-term threat.

The race to modernize payment systems through CBDCs is a key battleground, and central banks must navigate the complex challenges of cybersecurity, privacy, and disintermediation to succeed.Ultimately, the most important factor is maintaining the public's trust, a cornerstone of any successful monetary system.

As the financial landscape continues to evolve, central banks must embrace innovation, develop robust regulatory frameworks, and strengthen international cooperation to ensure they remain relevant and effective in the digital age.Only then can they hope to maintain their autonomy and continue to play a vital role in the global economy.The future of money, and its soul of trust, hangs in the balance.