CBDCs are the future of central bank money, but they are not yet ready - FinTech
CBDCs are the future of central bank money, but they are not yet ready - FinTech
A committee of the World Economic Forum (WEF), which is made up of central bankers and global technology providers, has profiled digital central bank currencies (CBDCS) as the future of the central bank money and presented it as one of the solutions for restrictions in today's payment sector. However, you have also stated that these have several restrictions that still need to be addressed.
WEF-PANEL explains advantages of CBDCS
A body for digital currencies of the Central Bank, which was part of the meetings of the World Economic Forum (WEF) in Davos, emphasized that it has high expectations of the digital currencies of the central banks (CBDCS) as part of the future of central bank money.
The committee, consisting of central bankers such as Julio Velarde, governor of the Central Bank of Peru, Lesetja Kganyago, governor of South African Reserve Bank, and Amir Yaron,
governor of the Israeli Central Bank, pointed out several supposed advantages that could offer these new financial instruments efficient implementation.
Governor Velarde stated that in his opinion, CBDCs are on the rise for payments and loans that go beyond bank integration. For him, the role of the central banks when building these instruments has to do with the determination of standards and the integration of private banks into the circulation, while at the same time people who are still outside the traditional banking system are offered financial inclusion. About it, he specified :
We learned on the hard tour that the revolution must come from the central banks. We do not know how CBDCs are implemented, but we take a closer look at what will happen all over the world.
governor Amir Yaron said that payments are now part of the top of the financial markets and that the central banks are therefore currently interested. For Yaron, CBDCs could have a transition function between the digital world and private banking institutions. He indicated:
We see faster payments, smart contracts, e-money, crypto-assets and stable coins, and CBDC is a public asset that can be complementary, but can also displace some of these things. CBDC could be the bridge between the new digital economy and the standard economy.
Israel has experimented with CBDCs. Your central bank is part of the Icebreaker project, the includes cross-border CBDC-based payment between Israel, Norway and Sweden In cooperation with the bank for international payment compensation (biz).
A more intelligent solution with reserved
for governor kganyago One of the main topics for more than 100 banks on worldwide Plain that examines CBDCs is to overcome the digital gap with new types of money such as cryptocurrency, which are currently on the rise as an alternative to central banks, and to modernize payment systems.
In this sense, he believes that the environment changes and that some central banks believe that they have to change with it and offer these digital alternatives. For Kganyago, there must ultimately be a national discussion on the demand side in which the big problems with the public decision on the use of CBDC have to do.
In conclusion, he explained that the problems in the implementation of CBDCs for national and cross -border payments will be more on the regulatory side than on the technological side, since these must correspond to the provisions of several jurisdiction from all over the world.What do you think about the role that CBDCs could play in the future of the money issued by banks? Tell us in the comment area below.
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