{"id":6990,"date":"2021-03-21T23:12:00","date_gmt":"2021-03-21T20:12:00","guid":{"rendered":"https:\/\/alfacash.blog\/?p=6990"},"modified":"2024-02-19T21:52:03","modified_gmt":"2024-02-19T18:52:03","slug":"what-cbdc-why-every-country-wants-one","status":"publish","type":"post","link":"https:\/\/alfacash.blog\/sk\/2021\/03\/21\/what-cbdc-why-every-country-wants-one\/","title":{"rendered":"\u010co s\u00fa CBDC a pre\u010do ich chce ma\u0165 ka\u017ed\u00e1 krajina?"},"content":{"rendered":"

As you may know by now, Bitcoin and cryptocurrencies are the opposite of traditional money. Except isn\u2019t always like that. Several governments and centralized financial institutions worldwide are very interested in the technology behind cryptos. This is why they\u2019re researching or directly developing a thing dubbed CBDCs: Central Bank Digital Currencies.<\/strong><\/p>\n\n\n\n

According to a report by the Bank of International Settlements (BIS, 2018<\/a>), this kind of asset is \u201ca central bank liability, denominated in an existing unit of account, which serves both as a medium of exchange and a store of value\u201d. In other words, they\u2019re very similar to kryptomeny<\/a>, but they\u2019re centralized and fully controlled by the issuer (the central bank).<\/p>\n\n\n\n

\"Kryptomena<\/figure><\/div>\n\n\n\n

Now, as described in a more recent report by the BIS (2020)<\/a>, CBDCs must follow some basic principles: <\/strong>\u201c(i) a central bank should not compromise monetary or financial stability by issuing a CBDC; (ii) a CBDC would need to coexist with and complement existing forms of money; and (iii) a CBDC should promote innovation and efficiency\u201d.<\/p>\n\n\n\n

So, again in other words, they\u2019re like stablecoiny<\/a> issued by the central banks. They would be pegged to the national currency and include Anti-Money Laundering (AML) rules and all the official controls. And, for now, most of them are only theoretical.<\/p>\n\n\n\n

Why CBDCs?<\/strong><\/h2>\n\n\n\n

A survey conducted by the BIS (2020) showed that around 80% of central banks worldwide are already engaged in the research or development of CBDCs. The reason is simple: this kind of asset could be more useful for payments than the traditional means of their currency (i.e. cash and electronic transfers).<\/p>\n\n\n\n

For the BIS, a<\/strong> CBDC would provide continued access to central bank money, operational resilience, payments diversity, financial inclusion<\/strong>, easier fiscal transfers, some level of privacy, and, maybe the most important feature, easier cross-border payments. Blockchain technology<\/a> could make this now complex procedure cheaper and faster.<\/p>\n\n\n\n

\"bitcoin-cryptos-rast-2020\"<\/figure><\/div>\n\n\n\n

Samozrejme, making remittances<\/a> with Bitcoin and other cryptos is still an easier and faster alternative to the current traditional methods. So, the central banks are planning to take advantage of the cryptocurrencies’ benefits without what they consider to be its drawbacks. Or, basically, without decentralization and the same level of anonymity.<\/p>\n\n\n\n

CBDCs vs decentralized cryptocurrencies<\/strong><\/h2>\n\n\n\n

The technical infrastructure for every CBDC is something rather pending-development in most cases. However, the great difference between CBDCs and decentralized cryptocurrencies lies in their philosophy.<\/p>\n\n\n\n

Bitcoin<\/a> and most cryptos were created by cypherpunks, which means activists who use privacy-enhancing technologies to reach financial, social, and political change. Bitcoin is, indeed, a way to recover the power of money from central institutions.<\/strong> It can\u2019t be controlled, censored, or limited in any way. This has been demonstrated by cases such as Nigeria.<\/a><\/p>\n\n\n\n

\"Najlep\u0161\u00ed
Bitcoin was banned in Nigeria because it helped to fund the protesters. Image by Kaizenify \/ Wikimedia Commons<\/figcaption><\/figure><\/div>\n\n\n\n

Eric Hughes describes this goal in the Cypherpunk\u2019s Manifesto<\/a>:<\/p>\n\n\n\n

\u201cPrivacy is necessary for an open society in the electronic age (…) We cannot expect governments, corporations, or other large, faceless organizations to grant us privacy out of their beneficence.\u00a0 It is to their advantage to speak of us, and we should expect that they will speak (…) We must defend our own privacy if we expect to have any. We must come together and create systems which allow anonymous transactions to take place.\u201d<\/p><\/blockquote>\n\n\n\n

On the other hand, the CBDCs pretend to use the same technology to establish controls over money and keep intact the current financial system. Requirements and rules for use, limit amounts, obligatory identification with official documents, and even further surveillance over financial activities are things to expect from these coins. Censorship and veto power are included too.<\/p>\n\n\n\n

Nevertheless, the main attraction of CBDCs would be the layer of trust added to the process.<\/strong> If something goes awry, the central bank would need to be accountable for its actions.<\/p>\n\n\n\n

CBDCs pioneers<\/strong><\/h2>\n\n\n\n

Out of that 80% interested central banks, we can mention some pioneers ahead in the race. The first one it\u2019s probably the Bahamas with its Sand Dollar<\/strong>, in development since 2019<\/strong> and already in circulation since October 2020. The main goal for its creation was to include in the financial system the most distant islands on the archipelago.<\/p>\n\n\n\n

Now, as they describe in the ofici\u00e1lna webov\u00e1 str\u00e1nka<\/a>, \u201cSand Dollar allows greater flexibility and accessibility for residents that want to participate in financial services via either a mobile phone application (iOS and Android) or using a physical payment card to access a digital wallet.\u201d<\/p>\n\n\n\n

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In October 2020, The Bahamas leapfrogged into the digital vanguard with the launch of the world\u2019s first central bank digital currency\u2014the sand dollar. https:\/\/t.co\/lW8qGLm7Xs<\/a> pic.twitter.com\/lu7TKY4ZpJ<\/a><\/p>— IMF (@IMFNews) 3. marca 2021<\/a><\/blockquote>