It’s a fact- the future of central bank digital currencies is accelerating. CBDCs and stablecoins offer reliable sources of digital currency for consumers, businesses and governments.
Although privacy and fear of government overreach continue to be debated, the regulation and adoption of CBDCs and stablecoins continue to pick up pace. Since the Covid-19 pandemic, the world is becoming increasingly digital. The past 18 months have seen many citizens use mobile phones and digital wallets to carry out financial transactions. Blockchain-based CBDC solutions allow for integration with mobile apps, enabling greater financial inclusion for citizens, while simultaneously eliminating third-party banking fees.
Current developments demonstrate that many of the world’s largest central banks are moving forwards with plans to pilot and launch their own digital currencies to complement existing fiat currencies.
The Banco Central do Brasil is readying plans to launch a CBDC in 2024. In El Salvador, the national currency is now Bitcoin. The Reserve Bank of Australia has issued a whitepaper and lengthy request for proposals to explore the options for issuing digital currencies (stablecoins and CBDCs). The Bank of England recently sought applications to help develop a £200,000 CBDC wallet prototype. This work is the precursor to developing a CBDC pilot, or a digital pound. The Banque de France and the Banque Centrale du Luxembourg have announced they are working together on an experimental CBDC initiative.
These facts demonstrate that the time is now for the advent of digital currencies backed by central banks. Because CBDCs can be managed, monitored, controlled and redeemed as needed by central banks, the implementation of these digital assets merits pilots and testing to establish trust and reliability.
Private technology platforms can help central banks accelerate their digital currency plans. With strong technology like EMTECH’s CBDC Innovation Tool Kit, Central Banks can easily plan and test their own CBDCs,
Today, transformation from fiat to digital currencies is just beginning. The move to digital currency offers the promise of lower costs for basic financial services, increased security, accelerated payments and reduced energy consumption.
When you consider these factors, as well as the audit trail that blockchain provides for tracking and tracing transactions, it’s easy to see why CBDCs and Stablecoins are moving from vision to reality. •
