The central bank's digital currencies are now part of the active projects of many banks around the world. A bank in China has recently launched its "Digital Yuan" project, and the Swedish central bank "Sveriges Riksbank" has unveiled a digital version of its currency called "e-krona" for microeconomics. In addition, the US Federal Reserve, the Bank of England, the Bank of Japan and the European Central Bank are all considering the technology. Meanwhile, the International Bank for Reconstruction and Development (BIS) has been widely discussing the CBDC digital currency, and recently predicted that the outbreak of the coronavirus and the contamination of paper money could be a factor in convincing central banks to replace paper money. Be digital in financial transactions.
Why are other central banks interested in such revolutionary technology as the heart of the economic structure? To some extent, they have responded positively to private sector initiatives, including the Libra Facebook project. However, CBDC potentially offers significant benefits for public use, which in itself makes it very attractive. In general, the motives of central banks include the following:
•Replacement for banknotes
•Promoting financial capacity
•Increase in deposit interest (the difference between the nominal value of the currency and the cost of its production and distribution)
•Implement monetary policy
•Establish a connection between payments and each person's identity
•Update payments for digital economy
What is striking in recent models is the participatory approach that many have taken to support the private sector. For example, the Bank of England is researching what we call a platform. That is, while the bank creates a platform for user exchanges, it becomes the only institution authorized to create or cancel a token. This offer gives PIPs the responsibility of reviewing customer checks and cleaning them up by providing additional payment services. Some have gone one step further. Researchers at the International Monetary Fund (IMF) have recently developed an "artificial CBDC" model in which a decentralized banking institution, such as a commercial bank, can issue money backed by central bank reserves. Ultimately, we are likely to see a wide variety of uses of CBDC in retail and other sectors, and this will have significant benefits for a wide range of organizations, from treasury institutions to payment networks that are open to the public. We're seeing a distinction between CBDC's growing retail models and previous CBDC wholesale projects, and we've already learned that CBDC is a great tool at the wholesale level, and its applications can teach us a lot about retail outlook. Bring. For example:
-The Ubin project of the Singapore Financial Institution, which taught us a blockchain-based CBDC, supports a more sophisticated and high-quality workflow. Including a decentralized cash storage mechanism.
-The Jasper project of the Bank of Canada and the Canadian Stock Exchange taught us that a blockchain-based CBDC would lead to effective progress. Such as day-to-day access to the T + 0 payment and settlement system, which can provide something more effective than the existing financial market structure.
-The Inthanon project of the Bank of Thailand and the Hong Kong Financial Credit Organization have taught us that blockchain-based CBDC allows for an overseas communication that facilitates the pricing of FX and PvP.
Blockchain has been instrumental in activating cryptocurrency tokens in asset payments, the ability to conduct peer-to-peer transactions, and the protection of distribution. In addition, blockchain activates atomic transactions. This means that at any given moment, any delivery against the payment will occur without the risk that one side of the transaction will be done before the other. Blockchain technology has also created a more secure structure for payment systems in which there is no focal point or hole for hackers to infiltrate, allowing a developing global financial ecosystem to connect. Looking ahead, a completely new structure for money can be envisioned in the near future. In many ways, it's like inventing credit cards that have fundamentally changed the nature of money. This structure uses blockchain technology and as a registration system based on central banks to provide a powerful regulatory framework for new assets. Extensive access to CBDC will be key for central banks to meet their obligations to provide new payment solutions. In addition, the relationship between the general public, companies and the financial industry will be accelerated by the parallel innovations of companies that use blockchain technology. In this ecosystem, central banks will have a special position to balance and provide purchasing power.