Digital currencies appear inevitable-Bitcoin messages presented
Digital currencies appear inevitable-Bitcoin messages presented
The Bank of America says that "digital currencies seem inevitable" and adds that digital central bank currencies (CBDCs) and stable coins are "a natural development of today's money and payment systems". The bank expects "favorite of the private sector to appear in all phases of CBDC implementation".
Bank of America about the future of money and payments
The Global Research Team of the Bank of America (BOA) published a report on global cryptocurrencies, digital assets and digital central bank currencies (CBDCs) at the beginning of this week. The bank wrote:
digital currencies seem inevitable. We consider distributed ledger and digital currencies such as CBDCs and stable coins as a natural development of today's money and payment systems.
"In our view, CBDCs that use the distributed Ledger technology have the potential to revolutionize global financial systems, and could be the most important technological progress in the history of money," said Boa.
The report explains that 114 central banks are currently examining CBDCs that represent 58 % of the countries worldwide and over 95 % of global GDP. It also finds that digital central bank currencies "do not change the definition of money, but will probably change how and when value will be transferred in the next 15 years".
According to Bank of America, "CBDC emissions by central banks seem inevitable for three reasons". First, "you can increase the efficiency in cross -border and domestic payments and transfers". In addition, "you can reduce the risk of central banks, to lose monetary control" and "increase financial inclusion".
private sector crucial for CBDC development
The report of the Bank of America adds that "the private sector is crucial for the development and emission of CBDC", and leads to:
Central banks and governments cannot build new financial systems based solely on distributed Ledger technology and have indicated that they will use the private sector to advance innovations in digital assets. We expect that beneficiaries from the private sector will appear in all phases of the CBDC implementation.
The report, for example, notes that governments can "assign orders to payment and consulting companies in exchange for specialist knowledge".
The Bank of America also pointed out some risks. "The output and acceptance of CBDC could also increase the frequency of bankruptcy if it is not properly designed," warned the bank and added: "In times of stress in the banking system, people could take off and exchange them for CBDCs, since there are none there is a risk of credit or liquidity if it is distributed with direct and hybrid approaches, which increases the risks for financial stability." The report comes to the conclusion:
The central banks could reduce this risk by temporarily or permanently introducing CBDC boundaries.
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