The global central bank for central banks, Bank of International Settlements (BIS), has released a concerning digital payments, in particular, the Central Bank Digital Currencies (CBDC).
According to the 29-page report, BIS urges central banks to adopt CBDC. “One option at the frontier of policy opportunities is the issuance of CBDCs, which could amount to a sea change,” the report reads.
Since the beginning of 2020, according to the BIS, there has been an increasing number of positive speeches addressing the benefits of CBDC (retail and wholesale). This is one of the reasons for the recent bullish outlook on CBDCs.
The COVID-19 crisis is another driving force, says the report. As countries went into lockdown, many individuals and businesses preferred to hold cash and moved their businesses online. Although holding cash was a precautionary measure, many people later began fearing the transmission of the virus from cash transactions.
Another driving force is Facebook’s Libra. Although its white paper failed to pass crypto regulations, its creators have been working hard to fix it. Benoît Coeuré, a BIS economic advisor, recently squashed rumours about an ‘arms race’ between the US and China for CBDC.
Currently, a Congressional Fintech Task Force is on adding the digital dollar into the US economy as a financial tool. There have also been for America’s CBDC.
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