The entrance of the Central Bank in the cryptocurrency world
According to a report coming from op-ed published back in November the 19th 2018, by the world-renowned economist Nouriel Roubini also known as Dr.Doom. Thinks that the central banks could replace cryptocurrencies in the coming currency competition.
The usage of cash could open the gates for CBDCs to take over, as cities like Sweden and China, where the usage of cash as a medium of exchange has witnessed a considerable decline in recent times. Roubini believes that the world is currently moving steadily towards the digital age where digital currencies may become the norm.
Digital payment solutions like Fintech companies are surging with businesses like Paypal, and Venmo as these have changed the way money is transacted in a lot of the major western countries. In developing countries like India and China the technology has become hotbeds for such instantaneous financial solutions, this can be seen on companies like WeChat, Alipay and Paytm.
According to a few highlights from Roubini, the majority of these Fintech innovations still operate under purview by Central Banks and share no bond with Cryptocurrencies and Blockchain Technology. In a scenario that the CBDCs has issued to the public, it will have nothing to do with “over-hyped” DLT.
He further stated that he has dubbed the crypto evangelist’s argument of the CBDCs will require Blockchain Technology and cryptocurrency as a necessary mechanism. Adding to his explanation the CBDCs will completely replace all the private digital payment solutions, irrespective of the fact that they are connected to traditional bank accounts or digital currencies.
The Blockchain technology has brought the internet with it
According to claims by the economist that posited that in case the CBDCs are issued, it will replace cryptocurrencies that are not anonymous, cheap, actually decentralized or even scalable. Taking a look at the anonymity aspect, Roubini has claimed that cryptocurrencies like bitcoin are not privacy-proof as organizations and individuals using crypto-wallets still leave a digital footprint.
A stated backed digital currency will bring many benefits after issuing CBDCs as stated by Roubini it will do nothing less than a boom for the financial system. CBDCs will enable access for millions of unbanked individuals to a near-free and secure payment mechanism through their mobile devices.
Central Bank Digital currencies (CBDC) in the coming years, Roubini sentiments that by sharing a bear striking resemblance to thoughts by the IMF Chief Christine Lagarde recently shared. In a report that was published Lagarde urged central banks to consider digital currencies in a bid to move towards the digitalization of money.
However, Roubini is still not sold on the implementation of cryptocurrencies and the Blockchain technology, as the professor called the Blockchain Technology:
“Nothing more than a glorified spreadsheet”
Central banks are ready for the world of blockchain and cryptocurrencies in the coming years. Banking and digital currencies are starting to gain traction from bankers around the world, additional reviews can be read here on the Dane County credit union.
What is your opinion on these statements made from the Central Banks? Feel free to leave your comments down below.