Central bank digital currencies (CBDCs) are the very modern concept of digital currency. It is minimizing the gap between digital currency and cryptocurrency. Digital versions of a country's fiat currency that are issued and backed by the central bank are called CBDC. They are a new form of digital money that could potentially replace physical cash and traditional bank deposits. The concept of CBDCs has gained significant attention in recent years 2022/23 with several central banks around the world exploring the idea of introducing their own digital currencies.
CBDCs are different from cryptocurrencies such as Bitcoin or Ethereum because they are issued and backed by central banks and are subject to the same regulatory framework as traditional currencies. CBDCs have the potential to offer the benefits of digital currencies like fast and cheap transactions. Here stability and security of traditional currencies will be maintained. I believe that the CBDC will increase financial inclusion by providing a digital payment option for those who do not have access to traditional banking services, especially in Developing and Least developed countries where financial inclusion is a challenge. CBDCs could also reduce the cost and time associated with cross-border payments because they can be instantly transferred between countries without the need for intermediaries. It will obviously reduce the cash transaction. Cash transaction has some risks like illicit activities such as money laundering and tax evasion. So, those risks will be minimized easily here.
The introduction of CBDCs could destabilize the financial system as it could lead to a shift in deposits from commercial banks to central banks. This could reduce the availability of credit and impact the profitability of commercial banks. There may be an impact of it on the overall economy. CBDCs could potentially lead to increased financial surveillance. This could raise privacy concerns particularly if the data is not adequately protected and could be accessed by unauthorized parties. With all these issues several central banks around the world are actively exploring the possibility of introducing CBDCs.
~ Regards,
VEIGO (Community Mod)
Greetings appreciated @veigo.
On the one hand, the issuance of CBDCs by government administrations could be interpreted as a stimulus towards the adoption of crypto worldwide, but I believe that we must consider other factors that would be related to this fact.
For example, the possession and use of CBDCs by citizens would also entail the payment of taxes. I imagine that the issuance of these digital currencies must be accompanied by a legal framework in terms of legislation that regulates their use.
We must remember that the main philosophy of crypto is based on the economic independence of citizens towards traditional financial entities.
Excellent post. I loved it. Thanks for sharing.
In another order of ideas, I would like to invite you to learn about the SP delegation program that we offer at Project Hope. We have just surpassed 250K SP, thanks to our delegator friends. This voting power allows us to distribute among our delegators 100% of the manual curation rewards we make. Our current voting power offers 11% APR, which we hope to increase in the coming months if more people like you join our program.
https://steemit.com/hive-175254/@project.hope/why-you-should-consider-supporting-project-hope-with-delegation-100-dividents-payout
Best regards.
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit
Thank you for the information, I will look into it...
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit
I'm willing to respond to you for any doubt.
Cheers!
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit