Hello to my friends who love life and keep smiling despite all kinds of negativity. In this article, I will talk about the "Central Bank Digital Currency (CBDC)" that you have often heard. What is CBDC…? How is it different from cryptocurrencies…? We will examine these issues together.
Let's start…
What is the Central Bank Digital Currency (CBDC)?
A digital form of the fiat token of a country or region based on blockchain technology. CBDC is central. It is issued and regulated by the competent monetary authority of the country. It is not decentralized like Bitcoin.
Traditional banking regulatory authorities around the world have struggled with popular cryptocurrencies such as bitcoin and ethereum. They have gained immense popularity due to their decentralized and non-regulatory nature and have become a threat to today's traditional banking system operating under the authority and control of a country's regulatory authority like a central bank.
Unable to control the growth and influence of such cryptocurrencies, many leading central banks around the world are working or thinking to launch their own cryptocurrencies. These regulated cryptocurrencies are called central bank digital currencies and will be operated by the relevant monetary authorities or central banks of a particular country.
Central Bank Digital Currency (CBDC), also called digital fiat currencies or digital base currency, will act as a digital representation of a country's fiat currency and will be backed by an appropriate amount of monetary reserves such as gold or foreign exchange reserves.
What are the Developments in the Central Bank Digital Currency (CBDC)?
To date, no country has officially launched a central bank-backed digital currency. However, many central banks have initiated pilot programs and research projects aimed at determining the applicability and usability of a CBDC.
Powerful states such as the Bank of England (BOE), the People's Bank of China (PBoC), the Bank of Canada (BoC) have started CBDC projects.
Cryptocurrencies such as Bitcoin and Ethereum (except stablecoins) do not have any reserve assets to support the value of the cryptocurrency. But CBDC projects are developed to be backed by gold and foreign exchange reserves, as they represent a coin.
There are also uncertainties around the world on how to classify cryptocurrencies (commodities, securities or currency). For this reason, it is not clear which institutions are under the supervision authority of crypto coins. Since CBDC is developed by the central bank of the countries, it has the legal currency status and is under the control of the central banks.
Source by investopedia
Yes, my friends, until 5 years ago, blockchain technology and cryptocurrencies were not taken seriously. Now, major financial institutions and governments are trying to address this issue. They want to centralize it for their own interests. They want to handcuff cryptocurrencies.
The current economic system has collapsed. In order to avoid this collapse, they want cryptocurrencies by changing them according to themselves. The system crashed ... We just expect them to admit it ...
Here you have to decide; Blue pill? Red pill?
(The question Morpheus asked Neo in the first film of the Matrix) If you haven't watched it, watch it ...
As I always said, listen to everyone, decide for yourself ...
I'm looking forward to your comments. Thanks to your comments, we can shape my next articles together. Let's stay in touch… Take care of yourself so that you and the people around you are happy…
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