According to a report by the Bank for International Settlements, as of 2020, over 80% of the surveyed central banks were looking into adopting the CBDC model. So, why have Central Banking Digital Currencies (CBDCs) become the hot topic of 2020?
The trend is clear, as we’re starting to see many countries, including China, Sweden, and even private US companies like MasterCard beginning to experiment with the endless possibilities of digital money.
This interest was further piqued after Facebook made a formal announcement of Libra in July 2019. The event represented a massive sentiment shift, and governments seemingly felt that Libra could pose a huge threat to the supremacy of sovereign currencies. If you consider the fact that Facebook already has over 2.5 billion users worldwide (1/3rd of the world’s total population), it pointed to a heavy disruption of the global financial system, if even a fraction of those people were to use it. Central Banks were quick to realize that their purpose is not only to protect the financial system from the seemingly enigmatic crypto world but to avoid the monetary disorder that it could create a regulatory vacuum and to deliver its citizens an alternative way that makes transactions more efficient and hence, the foray into CBDC research.
Read more: https://sovereignwallet.medium.com/why-are-governments-looking-into-cbdc-cf8b4f4c172