Our CEO Tony Saliba shares insights on CBDC’s and the future of money
Read the full Op-Ed on E-Crypto News
Central Bank Digital Currencies (CBDCs) are no longer a topic of speculation. The looming reality is that the financial world must prepare for their implementation. Central banks and governments are taking note of the growth and impact of crypto and are exploring ways to harness their benefits while aligning with their interests.
This trend of CBDCs is taking center stage in the world of finance and everyone must be prepared for their arrival, as it looks like they are the future of money.
CBDCs offer many advantages, including increased speed, reduced costs, and greater access to the financial system. However, there are also some potential risks associated with CBDCs, including privacy concerns, inflationary issues, and the potential disintermediation of commercial banks.
CBDCs have the potential to accelerate the adoption of crypto and bring it to the real Main Street mainstream. For example, if the Federal Reserve were to launch a digital US dollar that became widely used alongside cash/fiat/paper money and the current financial system, this would introduce millions of people to the concept of digital assets, wallets, and other crypto-related concepts. This could serve as a gateway to the larger crypto world and increase accessibility to it for a much larger audience.
However, CBDCs also have some potential ominous “downsides”.
One major concern is privacy. A central bank or government with direct digital insight into everyday purchases could potentially abuse such privilege to track purchasing habits, political contributions, religious affiliations, sexual preferences, and more.
In the wrong hands, this information could become a weapon for political purposes, creating a mosaic of individuals that could be shaped into a social score or used to target certain populations. Furthermore, a state-issued digital dollar is only a keystroke away from being frozen, reversed, or even confiscated, making privacy and maintaining freedoms crucial concerns.
the debate around the pros and cons of CBDCs will continue, but it is clear that the world must prepare for their inevitable arrival. The shift to CBDCs is likely driven by the belief that technology equals progress.
To avoid problems and risks, it is important to carefully consider the potential consequences and address them before they become a reality. It is the financial technology industry leaders who need to take on the responsibility to educate and raise awareness about CBDCs and their potential impact on the future of money.