Intense interest in cryptocurrencies and the Covid-19 pandemic have sparked debate among central banks over whether they should issue their own digital currencies.
China has been a leader in the development of its own digital currency. He has been working on the initiative since 2014. Chinese central bank officials have already carried out massive trials in major cities, including Shenzhen, Chengdu and Hangzhou.
“China’s experiment is very large-scale,” said J. Christopher Giancarlo, former chairman of the US Commission on Commodity Futures Trading. “When people arrive in Beijing next winter for the Winter Olympics, they will use the new digital renminbi to shop and stay in hotels and buy meals in restaurants. The world will see it work [central bank digital currency] very soon, next year. “
The US is playing recovery. In late February 2021, Fed Chairman Jerome Powell said the United States will engage with the public on the digital dollar this year.
Lawyers argue that central bank digital currencies can facilitate cross-border transactions, promote financial inclusion and ensure the stability of the payment system. There are also risks of confidentiality and surveillance with digital currencies issued by the government. Even in times of economic uncertainty, people may be more likely to withdraw their funds from commercial banks, speeding up the bank’s administration.
Watch the video above to learn how central bank digital currencies could become the future of global finance.