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Mobile money, Central Bank Digital Currencies (CBDC), stablecoins and cryptocurrencies have all been in the spotlight in the last few years. Receive both good and bad publicity. The wide range of offerings currently on offer is set to fragment the money landscape, with all offerings seeing varying levels of adoption. The long-standing trust in theDeFi & Digital Assets‘.
While this may suggest that other forms of money may struggle to acquire and retain users, Moody’s Investor Services believes that new payment solutions could be added to commercial bank offerings. Instant payment systems, digital wallets and tokenized deposits could move this money faster and cheaper. make them more convenient. However, these innovations also pose new challenges for banks.
New forms of money could take advantage of financial institutions that are too slow moving. Many companies are lagging behind commercializing instant payment services around the world.struggling to monetize
We offer these payment services without negatively impacting existing revenue streams.
As of the beginning of 2022, only 11% of all euro credit transfers within the EU were instant transfers. Committee to Adopt Legislative Proposals to Accelerate Its Deployment.
CBDC may offer the most likely currency to compete with commercial bank money. At first glance, this looks like the safest currency. Unlike commercial bank currencies, it does not rely on deposit insurance to maintain public confidence.
However, recent CBDC rollouts have met with limited success. For example, only 0.5% of Nigerians used his eNaira, his CBDC in the country, in October 2022, and since then its usage rate has risen even as Nigeria has suffered from cash shortages. has not improved significantly.
In December 2022, a former senior central bank official expressed disappointment that the country’s digital yuan was largely unused. Chinese city governments distributed millions of dollars worth of digital yuan as subsidies and consumption coupons during the holiday season to boost adoption. Still, some Chinese civil servants will soon receive their salaries in digital yuan.
Overall, the success of all kinds of money, commercial bank money. CBDC; stablecoins; the digital money ecosystem of the future will depend on money’s ability to fulfill his three basic functions.
