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World Economic Forum (WEF) Published a dynamic take on CBDC in a blog post Entitled, What is a Central Bank Digital Currency (CBDC)?
August 9, Reserve Bank of Australia Central Bank (RBA) announced in a statement Collaborating on a year-long research project with the Digital Finance Collaborative Research Center (DFCRC) to explore innovative use cases and business models to introduce CBDC in Australia.
In the blog post, the WEF repeats the definition of the European Central Bank (ECB). While the definition describes CBDC as a risk-free form of currency guaranteed by a country, it predicts that every European state will issue its own digital euro by mid-2020. Ten years.
The blog post continues to explain that CBDC is a safe haven asset as it does not involve the risks and volatility inherent in cryptocurrencies. Individuals and entities can also store CBDCs in central banks or as electronic tokens on mobile devices, prepaid cards, and other forms of digital wallets.
Digital currencies are presented as a faster, easier and safer way to make daily payments. According to the WEF, this makes CBDC a complement to physical cash rather than a replacement.
Regarding the benefits of CBDCs for society at large, the WEF said CBDCs have the potential to alleviate poverty and promote financial inclusion by making access to money easier and safer. Also, because CBDCs are convertible into domestic currencies, they have the potential to enhance the resilience of the financial system when cash becomes scarce or unavailable. Finally, the possibility of him using DLT to tackle financial crime is also an incentive, as the CBDC could pave the way for improving his AML/KYC capabilities and money flow transparency.
Apart from the RBA, other central banks are also considering using CBDC and distributed ledger technology. WEF central bank digital currency policymaking toolkitTop use cases include retail CBDCs for peer-to-peer payments and consumer-to-merchant payments, or for more efficient inter-bank payments made outside of traditional correspondents or other payment systems. There are wholesale CBDCs for commercial banks and clearinghouses to leverage. .
The WEF is currently assisting central banks in the process of developing, piloting and implementing policies to adopt DLTs and CBDCs. It was emphasized that decisions about how to use technology should be guided by considering all the risks that relatively new technologies can pose, as well as inputs from multiple sectors.
