According to Christine Lagarde, head of the European Central Bank (ECB), a growing number of central banks in various parts of the world are already exploring the capabilities of cryptocurrencies.
She also added that highly secured digital currencies are needed to help consumers migrate to a digital economy in the smoothest way possible.
The ECB discovered that consumers don’t want total anonymity with digital currencies because they understand the major risks that come with it. Also, they want digital currencies to be as secure as possible for all of their transactions.
As early as 2014
CBDCs are already gaining traction in various parts of the globe, but as early as 2014, countries such as China and Sweden are already exploring the possibilities of a digital currency.
But one major concern that they cannot ignore is that major banks would have a greatly diminished role when digital currencies become widely used.
Another concern, this time from the consumers, is the lack of privacy since both the central banks and major banks would have a complete overview of the consumers’ economic activities.
To address the consumers’ concerns, a self-custodian wallet is seen as a viable solution to protect their privacy. This type of digital wallet can create their own bank-chain address which can provide them additional protection.
Crypto vs. CBDC
With crypto and CBDC’s expanding influence in the global market, the clash between these two currencies is inevitable in the future. These two currencies would compete using their unique qualities and vie for economic dominance.
But the fast-paced development of technology and the various political situations in different countries would be the major factors that will decide the fate of these two currencies.
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