A notion that has faced much resistance now looks to be gaining momentum and possibly even traction in some parts of the world. The concept is the digitisation of money, but rather than the borderless cryptocurrency we have seen in the form of decentralised systems such as bitcoin and ether, we are talking about government-led initiatives with digital legal tender issued by central banks. The digital legal tender typically reflects country’s existing fiat legal tender in a 1:1 ratio and is most commonly known as central bank digital currency, or CBDC for short.
How does it compare to an existing payment-processing system in the fiat world?
Historically, over the last few decades, fiat funds have been transferred from A to B through interbank funds transfer networks such as SWIFT, a global messaging system notifying banks of payment instructions and confirmations. Transaction times, fees and transparency are a growing challenge in a world which is becoming more data driven, global and reliant on time efficiencies, not to mention safety conscious in respect of money laundering and fraud.
Read more: https://www.caymancompass.com/2020/10/27/central-bank-digital-currency-in-the-caribbean/
