Discussion as regards creating a central bank digital currency (CBDC) continues in several parts of the world as it leaves the crypto world with the question of could this CBDC improve payments processing across the world? It also raises questions like after its launch would it oust the traditional fiat currencies and so on.
However, many countries and institutions continue to show interest in it. Most recently, at the Davos conference in Switzerland, the U.S. digital dollar gathered a lot of attention from a wide range of experts.
Former chairman of U.S. Commodity Futures Trading Commission (CFTC), Christopher Giancarlo, believes that traditional fiat currencies underserve many people around the globe. This is as many countries begin analyzing the effects of issuing digital versions of their local fiat currencies.
Reportedly, digital currencies could help countries’ monetary system become more efficient n the long run. Switzerland, Bahamas Island, China, Japan, and even the EU are beginning exploring the possibilities and advantages of switching to a digital currency.
Possibilities of creating a virtual currency
According to Neha Narula, the Director of the Digital Currency Initiative at MIT, he explained that the digital dollar could be taken into consideration in the future. The global crypto leader at PwC, Henri Arslanian, suggested that CBDCs could change the way in which payments across borders are processed.
Narula said “The potential traceability features of CBDCs could, for the first time, give us a good fighting chance against corruption and money laundering. CBDCs also could allow policymakers to measure the impact of certain policies accurately and immediately.”
Outside countries and institutions, private companies around the world are also brooding about creating a digital currency. Libra, the most popular and controversial digital currency yet to be launched by Facebook faces several regulation issues. Telegrams also is planning to launch its own gram token as Ripple already trade its own XRP crypto.
Countries planning to launch own CBDC
As several countries of the world continue to work to achieve CBDC, others are at the forefront already drafting policies and making for the launch of their CBDC.
China is at the forefront of these processes believed to be in competition with Facebook’s Libra. The country already as part of preparations to launch its CBDC started implementing crypto law governing cryptographic passwords.
The law, however, aimed at enabling the development of the cryptography business and ensuring the security of cyberspace and information.
Another country that has actually begun using its own crypto and only aims to integrate it into its citizens’ lives is Venezuela. The South-American country facing several economic issues believes it’s Petro crypto would help ameliorate economic issues it faces.
Christine Lagarde also, the Europe central bank president recently that the ECB has assembled a task force to look into and analyze the feasibility and potential outcome of establishing a Central Bank Digital Currency (CBDC).