On several occasions we have stated in this topic, even it was exposed in the last event that we participated. The digital money is in boom and is changing the world as we know it, giving birth to the CBDC. However, these coins depend on just the Central Banks. Emerging the doubt, that even today we will present as critical, if these institutions follow the pace of the market.
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Digital Money
This topic is very complex and extensive, therefore, if you want us to do an article covering all of the topic, its history and present, do not hesitate to leave it in the comments. However, for the context of the article it is necessary a brief introduction to the understanding of the topic. In few words the digital money refers to any unit of currency that has value and does not require an endorsement physical in order to function. In this sense we mean that each unit of money does not require a ticket to back it up. For this reason some people consider the cryptocurrencies as digital money. It should be noted that this issue was existing since years, but recently it is taking in vogue. Giving birth to institutions that support this kind of money, the Neobanks. In addition, in economic and social terms, the behavior and demand of the users is turning towards the digital money. It makes sense to consider the benefits of this money, such as the speed of transactions and ease of foreign exchange.
And what about the Central Banks?
As the monetary institution of central of each country, the issue of digital money is critical for Central Banks. On several occasions we have been able to observe the response of some countries, with the CBDC, as is the case of China. However, the General Manager of the Bank for International settlements (BIS), Agustin Carstens, urged central banks to adopt the digital money. He added that the financial world is going through a revolution at this time, and the banks, as establishments to be reliable, should have the control. Quoting from his speech we find the following sentence that explains its position: “The public property of the central bank to improve the functioning of the monetary system. They do this by giving the private sector greater scope to innovate, to the benefit of all. The central banks amplify the efforts of the innovators of the private sector, giving them a solid foundation on which to build. Here is where central banks should concentrate their efforts. Technological advances (digital money) of today certainly can help you build a financial system more efficient and inclusive, and central banks need to adopt that innovation. At the same time, their traditional roles are tailor-made for the many innovations on the horizon, including the digital currencies of the central bank (CBDC)”. Noting that for Carstens the digital money valid are only the CBDC, stating that the cryptocurrencies are just copies. Makes this comment because he was asked his opinion about a Pound and a Facebook. The following two tabs change content below. I am a student of economics, interested in innovation and technological development, always faithful to that tomorrow will be a better day.