Dubbed “the next disruptor” by Deloitte, central bank digital currencies could affect the global financial system as a whole.
Will it create a more circular economy or a perfect dystopia? Exactly what the future holds for CBDCs beyond their debut is too early to tell. But experts seem to agree that one thing is certain: CBDCs are on the way.
Central Bank Digital Currency, Explained
Put simply, a central bank digital currency is a digital fiat currency. CBDCs act like traditional banknotes, but come in a programmable, digital form.
Unlike existing digitized capital, like the numbers tallying our bank balances or tendered online at checkout, CBDCs differentiate themselves by being liable to the Federal Reserve versus a commercial bank.
Currently, there are two types of government-backed money in circulation: physical currency and digital balances tied to commercial banks. If adopted, CBDCs would establish a third payment option without replacement or a reduction in value of those in existence.
In theory, policymakers would be able to delete or airdrop money into citizens’ digital wallets at will.
“You can imagine that in a recession, airdropping money that has an expiration day of, say, one week into citizens’ digital wallets would be an effective way to force people to consume and thus stimulate the economy,” said Scott Byron, head of venture and research at crypto exchange platform AscendEX. The 472 million payments in financial relief paid to U.S. households impacted by the Covid-19 pandemic, for example, could have been auto-distributed if CBDCs were in effect.
paper currency will be labeled “germy, dirty”.
I agree with you PP. To all those people that don’t like germy dirty paper money, then use barter. If you can’t barter then & don’t like paper then bend over and grab your ankles because your fixing to be abused in a way you may not like. Oh, send me all your dirty, germy and grimy paper money and coin I will find some use for it. Thank you
Paper Fiat Feral Reserve Bankster “money” will not last very long. real silver & gold & lead, plus barter and local exchanges is all that will offer any value. imo, though “cash” is a temporary fix for bank closures bail ins.