A 44-page report commissioned by CPA Australia delves into the status of central bank digital currency development worldwide, while exploring viable blockchain candidates for hosting CBDCs in the coming years.
Bitcoin’s decentralized network and lack of oversight by banks or governments make it generally unsuitable for use in a national CBDC network, notes the report. Although Bitcoin is still accepted as a medium of exchange the world over, its volatility and unpredictability have resulted in a lack of trust among central banks. The report states:
“Despite it not being legal tender, Bitcoin is popular, and it is accepted as a medium of exchange in many places. Bitcoin’s price has been subject to spectacular volatility in recent years and this volatility has resulted in a lack of confidence in Bitcoin as a medium of exchange or as a store of value and raised concerns among central banks as to the viability of cryptocurrencies as CBDCs.”
While Bitcoin continues to puzzle and confound lawmakers in most jurisdictions, the report also notes that its legal status as a currency is undergoing a transformation. The report cites a ruling by the Commercial Court of Nanterre in France in 2020 that declared “Bitcoin is an intangible asset with an exchange value, equivalent to fiat money at law.”