The acceptance and use of cryptocurrency has accelerated during the pandemic, and with that the banks motivation to innovate and embrace digital currency rather than fight against the tide. Cryptocurrency is designed to be decentralized and anonymous, which is attractive to those fearing too much power and surveillance by governments on citizens spending, similar to the way tech giants mine user data. Central Banks such as ‘Bank of England’ and ‘Banco De Mexico’, are planning their own Central Bank Digital currency. China has already launched its own CBDC, and ‘Bank of Jamaica’ will be launching their own CBD later this year after a successful pilot in 2021. The impacts are far reaching both economically and for humanity. What would make a CBDC different to card and digital payments already in existence? CBDC will make payments faster with immediate settlements, and could make payment processing and transaction fees cheaper, while there is also a focus on encouraging innovation and increasing efficiency. Maintaining currency sovereignty, legal and regulatory safeguards such as payment tracking for anti-money laundering and terrorism, are also drivers for central banks own digital currency, which can be distributed through commercial banks without causing too much disruption. CDBC’s could enable financial inclusion for the 1.7-billion adults around the globe who are without a bank account, either through digital wallets, or legislation to ensure everyone has a bank account of some sort.
Through monetary policy committees and strong economic governance, financial stability, cyber resilience and energy efficiency will be achieved, CBDC can complement traditional currency and co-exist with commercial bank money and bank notes, without harming the economy, banking or citizens. Choice will as always be key for global citizens in 2022 and beyond.
Extract: Digital World Predictions 2022
About the Author
Deborah Collier is a Strategic and Futurist Leader is in business, digital, education and business with career experience in governance, banking e-treasury and commerce. She is President of Digital Skills Authority, and has delivered her annual digital world and digital business predictions for 13-years.