Leading economists predict that by 2030, a staggering 24 national projects for digital currencies will have been launched across the globe. Experts highlight that CBDCs have the potential to address several challenges faced by the banking industry, particularly in the realms of interbank transfers and securities transactions.
“Central bank money is of utmost importance for interbank payments and securities transactions due to its negligible credit and liquidity risks. This allows institutions to achieve settlement finality and contributes immensely to financial stability. Despite the availability of alternative payment instruments, CBDCs could become the new form of risk-free Central Bank money that would open up unprecedented economic models and integration points. Simultaneously, state-owned cryptocurrencies will retain their position as secure payment instruments and serve as the foundation for digital payments in the next generation of financial markets,” states the comprehensive report.
Analysts also argue that national digital currencies hold the potential to facilitate faster and more secure cross-border transfers. However, the widespread adoption of CBDCs necessitates the establishment of a legal framework, a process that could take an indeterminate amount of time.
Furthermore, recent reports highlight that Hong Kong’s financial regulator recognizes significant advantages in utilizing government-backed digital currencies.