Exploring the future of banking with CBDCs
Amb - Prof Bitange Ndemo
Kenya's Ambassador to Belgium & EU | Professor of Entrepreneurship | Technocrat | Columnist
Contrary to the beliefs of sceptics, the development and adoption of Central Bank Digital Currencies (CBDCs) is an inevitable shift already underway. This transformation is driven by changing business models
Central banks from various countries, including Canada, the European Union, Japan, Switzerland, England, Sweden, the Board of Governors of the Federal Reserve, and the Bank for International Settlements, play a crucial role in developing the foundational principles and core features of CBDCs. These institutions have conducted extensive research and produced valuable reports on key aspects of CBDC implementation.
Reports on Systems Design and Interoperability, user needs and adoption, and financial stability implications provide essential insights into the potential opportunities and challenges associated with CBDCs. They acknowledge that the evolution of money is inevitable given the increasing digitalization of economies, rapidly changing user needs and the transformative impact of innovation
Furthermore, the use of cash for transactions is declining in many jurisdictions, while non-bank private sector entities are introducing new forms of digital money, such as stablecoins. These developments highlight the need for central banks to adapt and explore how they can fulfil their public policy objectives
领英推荐
However, it is worth noting that while preparations for CBDCs are underway in the global north, discussions and plans for adopting digital currencies in the south are still frozen. This disparity could lead to capacity issues and challenges for countries in the south as they try to catch up with the rest of the world during CBDC adoption.
In conclusion, the shift towards CBDCs is a reality that cannot be ignored. Central banks and international organizations are diligently working to shape the future of finance by laying the groundwork for CBDC implementation. The reports and research being produced highlight both the potential opportunities and challenges, reaffirming that the evolution of money is an inevitable and necessary response to the changing dynamics of our digital economies. However, addressing the potential disparities and ensuring a more inclusive and coordinated approach
The writer is Kenya’s Ambassador to Belgium, Mission to the European Union, Organization of African Caribbean and Pacific States and World Customs Organization. The article is written at a personal level.
Creation addict, problem solver, setting up / revising processes. Structuring (preventive) maintenance to reduce overall OPEX. I have a broad understanding and experience in just about anything in, on and around premises
1 年At times it feels as if these developments are just to fill the hunger for control. Order may be needed, but this may not necessarily be filled in by governments/central banks. A single base unit for ease of valuation may be needed, but only as a reference-tool. If central banks feel they need some form of control, at least let them agree on a universal adoption of a single cbdc. It would be good if such a currency is backed by assets rather than govt guarantees.
Managing Director at Privvycon Limited
1 年With what we're seeing in China. Wouldn't it be prudent to be cautious of the kind of control that governments through Central banks will hold over the populace?
The Wise Realizes His Ignorance - Thomas Sowell
1 年CBDCs do not solve the persistent issue of fluctuating exchange rates between state currencies. Instead, we should consider adopting a single international scientific unit as a currency, such as kWh (kiloWatt-hour), where 1 coin equals 1 kWh. This would alleviate poverty while we should also be addressing land distribution and reducing global population in a positive manner. The Western countries' significant pollution has resulted in over 50% of males being unable to father children. Rather than being offended, we should accept this as a consequence. Personally, if I reach a point where I cannot care for myself and have no one, not even an Elon Musk robot, to assist me, I would prefer to pass away, expressing thankful gratitude to the world and the people who made my time here wonderful. While we are at it - significantly important in line with CBDC is - to plant trees. I have planted around 400 trees in the most recent 12 years. We should all plant some trees every year. 10, 15, 20 - but plant them. Maintain them until they are 3-4 meters tall, then they can take care of themselves. Plant where no trees are...
The Wise Realizes His Ignorance - Thomas Sowell
1 年Also inevitable are the new upcoming digital stable coins. We do not see many of these as they are not profit making for the owner or maker of it, they are rather international currencies. I am participating in one network of corporations creating such a stable coin around energy. It will become yet a new dawn for stablecoins as this one here is even more boring than the rest as it cannot even inflate, which is the last bastion for making cash out of cash. Seemingly uninteresting it may become a coin for the masses as it will work directly contradictory to any CBDC or usual coin in that it will maintain it's value no matter what happens in the market. It can therefore not become speculated against as anyone "investing" in it will inevitably lose out, while any consumer holding on to it will be protected exactly against the very same inflation. So. While indeed CBDC will happen, this other trend will provide a bastion to cling on to for billions of people world wide. This may over time when it become wide spread, therefore totally undermine the forever inflationing national currencies, even though it will neither provide us not anyone else with any financial benefits. Ask me how it works :-) Have an enlightened day.
Thanks, Prof, for sharing this article.