The impact of CBDCs on the world

Quick take

1 minute read

• As central-bank digital currencies become more popular by the day all over the world, there is a potential that it could change our outlook on money and its uses in general. 

• More than 80% of central banks are in one way or another looking into the world of central-bank digital currencies whether this is research, experimentation or even piloting a test project before launch. 

As central-bank digital currencies become more popular by the day all over the world, there is a potential that it could change our outlook on money and its uses in general. More than 80% of central banks are in one way or another looking into the world of central-bank digital currencies whether this is research, experimentation or even piloting a test project before launch. A recent bank for international settlements chart explains the continuously growing interest in these asset classes and even goes on to highlight Google search interests and how they have increased over time.

One of the biggest countries to keep your eye on in this field is China which is seemingly the leader of CBDC development in the world. The pilot form was introduced by the People’s Bank of China this year and plans to use it in the space region for the 2022 Winter Olympics in Beijing.

One thing that you may not have known is that China has actually been working on a CBDC since 2014 and early reports have indicated that the bank is hoping to release it by the end of this year but other rooms indicate it won’t be in operation until 2022.

It is more than likely going to be an important day when China, one of the biggest economies in the world, launches its own digital currency backed by its central bank.

But looking across the pond to the United States, America is taking its own important steps to develop its own digital currency. The Federal Reserve in the United States announced in August that it is going to be taking the steps towards integrating instant payments in the country by 2023 at the earliest. 

A conversation that comes hand-in-hand with the topic of CBDCs is that of the debate on privacy and the power of government and its policy goals. The fundamental concept that our money could be purely digital is a common theme that sparks further arguments that reform could be necessary.

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