As a seasoned crypto investor with a keen interest in central bank policies, I find the BIS survey results intriguing. The imminent adoption of Central Bank Digital Currencies (CBDCs) by numerous central banks worldwide is a clear indication that blockchain technology is no longer a distant dream but an inevitable reality.
According to a recent survey conducted by the Bank for International Settlements (BIS) among eighty-six central banks between October 2023 and January 2024, approximately 94% of these institutions expressed interest in issuing Central Bank Digital Currencies (CBDCs).
The survey reveals the distance each country has traveled towards adopting blockchain technology, specifically in relation to central banks issuing Central Bank Digital Currencies (CBDCs) for inter-bank transactions. Notably, this survey focused on wholesale CBDCs and not the retail type. The key distinction lies in the user base of these digital currencies.
Financial institutions will employ wholesale central bank digital currencies (CBDCs) for activities like settling transactions between themselves on a larger scale. In contrast, retail CBDCs are intended for everyday use by individuals. Although it may take several years before full-retail CBDCs become widely available, their wholesale counterparts have already been put into use in certain regions such as the Bahamas, Nigeria, and Jamaica.
In the near future, numerous jurisdictions are set to launch their retail central bank digital currencies (CBDCs), having initiated creation, testing, and deployment processes. The survey suggests that many more will follow suit soon. The data also indicates that stablecoins see limited use beyond the cryptocurrency realm. Their value being pegged to fiat currencies makes potential applications similar to using traditional money.
As an analyst, I would rephrase that sentence as follows: From my perspective as an observer, central banks have yet to incorporate cryptocurrencies for their settlement and transaction needs. The retail user base is still a minor player in the crypto sphere, and the general public remains largely unfamiliar with this asset class.
As a financial analyst, I would explain it this way: Central banks prefer deploying central bank digital currencies (CBDCs) on private blockchain ecosystems due to the control they retain over transactions. In contrast, using stablecoins in decentralized public blockchains reduces their ability to regulate and manage monetary policy effectively. Therefore, CBDCs are a more attractive option for them.
Despite the advantages of privacy in these blockchains, potential challenges may arise from the outset due to their fragmented ecosystems and limited interoperability. Furthermore, the private nature of these central bank digital currencies (CBDCs) is generating controversy within the cryptocurrency community. Recently, even a high-profile figure like the current US presidential candidate and former president Donald Trump has voiced concerns, labeling CBDCs as authoritarian.
Image by Andreas Breitling from Pixabay
Read More
- W PREDICTION. W cryptocurrency
- AAVE PREDICTION. AAVE cryptocurrency
- PENDLE PREDICTION. PENDLE cryptocurrency
- ZETA PREDICTION. ZETA cryptocurrency
- AEVO PREDICTION. AEVO cryptocurrency
- FutureNet Co-Founder Roman Ziemian Arrested in Montenegro Over $21M Theft
- JGN PREDICTION. JGN cryptocurrency
- EUR JPY PREDICTION
- ETH CAD PREDICTION. ETH cryptocurrency
- USD JPY PREDICTION
2024-06-17 22:15