Several countries are considering or already piloting Central Bank Digital Currency (CBDC). According to an analysis by BanklessTimes.com, the number of countries with central banks working on CBDC has risen. In 2020, 35 countries were exploring CBDC compared to 105 this year. This represents a 200% increase in just two years.
Speaking on the data, Jonathan Merry, CEO of BanklessTimes, said,
CBDCs have the potential to reduce costs, increase efficiency and speed up transactions. They could also help reduce financial crime. However, many challenges must be overcome before CBDCs can be widely adopted. These include technical challenges, such as ensuring interoperability between different systems, and regulatory challenges, such as preventing money laundering and terrorist financing.
BanklessTimes CEO Jonathan Merry
What is CBDC?
CBDC is a digital version of a country’s fiat currency. It can be used to make electronic payments and exchange for other assets, such as gold or cryptocurrency.
There are several benefits of CBDC. First, it can help to reduce fraudulent activities. Second, it can help to reduce the cost of printing physical money.
Third, it can help to increase financial inclusion by providing access to banking services to those who do not have a bank account.
Some risks associated with CBDC include the potential loss of control by the central bank, increased volatility, and cyberattacks.