It is not a secret to anyone that the view that governments have of cryptocurrencies is usually more cautious than that of private users, who are generally the ones who promote their potential, so there is an inherent tension between these two camps. . Policy makers in the banking industry (stated intentionally) have been discussing for years the possibility of a central bank digital currency (CBDC - called digital fiat currency or digital base money), as a way to compete with the cryptocurrencies and somehow beat them on their home turf. Since crypto-assets like Bitcoin, ethereum, etc. are not backed by traditional financial institutions or banks, users can own and trade them without going through the usual verification process like when using fiat money and also remain anonymous. This has caused concern among central bankers and government officials who worry about money laundering and other criminal activities facilitated by digital currencies. As a result, they have released statements indicating that they are looking at ways to issue their own digital currencies that would allow central banks to maintain control over the money supply. This concept of government-controlled money rivals the freedom and anonymity that is derived from the use of crypto assets, existing financial policymakers view cryptocurrency with skepticism due to its volatile nature and lack of regulation.
According to CBDC issuers, they hope that they will help improve the existing banking system by making money more accessible and efficient while increasing financial inclusion. It is posited that unlike other forms of money, CBDCs will have an anonymous fungible token that cannot be traced back to its owner, giving users more privacy when transacting. Furthermore, CBDCs can reduce the costs associated with banking, since they do not require a third party or intermediary. This could lead to further cost savings for banks and customers using this type of currency, since they will not need to have physical cash and users can keep their digital currency in a secure wallet without the need for intermediaries or banks. Another benefit of using CBDC is the increased security efficiencies it provides, as it eliminates the risks associated with counterfeiting or tampering with cash payments. It also allows governments to monitor transactions more easily than traditional money, which could help catch fraudulent activity sooner and prevent it from happening in the first place (Note: I usually try to take an unbiased view of what I write about but this is one of the times I can't help it: too much control over privacy, right?).
Well, as it is, we continued, it said that CBDCs are an extension of existing central banking infrastructure, which means that they are backed by a government central bank and are expected to offer customers the same protections as traditional financial institutions. . They could also potentially promote financial inclusion by allowing more people to access banking services through digital channels. CBDCs solve many of the problems that current core banking systems have, such as speeding up Federal Reserve research, integrating technology platforms with current core banking systems, and creating secure payment systems. CBDCs could also reduce the costs of printing currency and simplify money creation and payments, which could lead to faster payment processing times and greater efficiency in payment systems.
CBDCs take place on a blockchain matrix and use central banks to transact, securities, commodities and other assets, this means the central bank can settle transactions for banks, credit card processors, fixed income securities in currencies and other assets. Some time ago the Federal Reserve announced that it will explore the use of CBDC in its system (we'll see how everything turns out in the not too distant future).
“Everyone has their own forms of expression. I think we all have a lot to say, but finding ways to say it is more than half the battle" | Criss Jami (existentialist philosopher, poet, essayist, musician, singer, designer and lyricist)."Everything we hear is an opinion, not a fact. Everything we see is a perspective, not the truth" | Marcus Aurelius (Roman Emperor).
