In a recent survey, the Switzerland-based BIS, owned by 63 central banks, predicts the issuance of as many as 15 retail Central Bank Digital Currencies (CBDCs) and eight wholesale CBDCs by the end of the decade. Astonishingly, 93% of Central Banks globally are somewhere in the pipeline of CBDC research, planning, and piloting stages.
The trend towards CBDCs may come to light as a way to bridge the financial gap among the unbanked worldwide. Notably, countries like India, the United Kingdom, and the European Union Nations are vibrant in this movement. Yet, it poses some unsettling questions about the intrinsic value of traditional cryptocurrencies considering CBDCs would be under governmental control, opposing the decentralized nature of crypto.
While the global work on CBDCs is making strides, the survey implies that stablecoins and other virtual currencies have not permeated well outside the crypto market. Despite the growing adoption by big institutional investors and countries developing regulatory frameworks, most transactions continue to remain within the crypto ecosystem. However, in terms of stablecoins, cross-border remittances have been the exception, becoming the primary application in the mainstream world.
< a href=/?s=CBDCs>CBDCs could spark a broader adoption of digital assets among diverse demographics, including low-income earners and small-scale businesses. For instance, last month, the Bank of England produced a report detailing a two-tier retail CBDC model, which could alleviate the centralization concern. This approach would involve Central Banks developing the infrastructure, and multiple financial institutions devising APIs to ensure decentralization.
Even so, this new horizon is seen with scepticism, showcasing a discord between proponents and opponents. For instance, Florida’s Governor, Ron DeSantis, labeled CBDCs as a surveillance tool of the government, even pledging to resist the “weaponization of the financial sector” and related ideologies.
What these competing visions illuminate is no less than the future of digital currency itself – central control or decentralized freedom? Will the upsurge of CBDCs shroud the true essence of cryptocurrencies or open up avenues for digital assets to reach the unbanked and underserved of the world? As we stride towards the digital asset era, these questions will become ever more crucial, shaping up the realm of cryptocurrency in the coming years.
Source: Cryptonews
