- ‘Central banks and the future of digital money’ is a recent report by ConsenSys talked about the highlights of a nation releasing their own digital currency.
- China is one country that a central backed digital currency (CBDC) could see launch.
‘Central banks and the future of digital money’ is a recent report by ConsenSys talked about the highlights of a nation releasing their own digital currency as well as listing cross-border remittances at a cheaper price. China is one country that a central backed digital currency (CBDC) could see launch but even if it’s not China, it’s going to happen one way or another.
The report says:
“As tokenised asset markets are created there will be a need for tokenised payments for the immediate settlement of transactions. CBDC could be the key ingredient in introducing a viable, broad-based blockchain-based payments system that could enable a large-scale, decentralised clearing house and asset register.”
Furthermore, the report goes onto note that if central banks don’t issue their own cryptocurrency, then the market would end up relying on so-called ‘private payment tokens,’ which could potentially result in numerous risks that are in relation to them. Such concerning risks can include the private entity failing as the private token might be trapped and not be accessible at all.
“A CBDC would represent a risk-free, widely accessible alternative. It could have other benefits too. It could help bring massive efficiencies and cost savings to the financial system.”
On top of this, the paper goes onto to cite risks in relation to foreign platforms, in relation to transactions via the payment-versus-payment settlement path. As per AMBCrypto:
“Retail CBDC could also be a way to offer individuals access to digital and risk-free reserves, something that is only available to major financial institutions at the moment. CBDC would mitigate this risk by giving central banks direct influence over all or a portion of the money supply in digital markets.”
It will be interesting to see how this plays out. For more news on this and other crypto updates, keep it with CryptoDaily!