Central Bank Digital Currencies (CBDCs). Is It For The Benefit Of All?
So many countries have come up with the idea of introducing digital currencies and of course, many countries have already effect the use of the digital currencies in their central banks. That's why whenever you hear people mention CBDC, what it means is Central Bank Digital Currencies.
It is pertinent to that understand CBDCs ain't crypto and they have some salient dissimilarities which ranges from its privacy, its centralized nature, it's permissioned and infact I do not think it is open-sourced.
They are generally swayed by a central body which always need customers to undergo some KYC (Know Your Costumer) verification where costumers have to disclose their personal information before they could be given access to the CBDC. It is only the bank that understand fully how the CBDCs functions. Therefore there are some illusions in the transparency aspect of the CBDCs.
From the grassroot, cryptocurrency was introduced to give everyone maximum freedom to their funds but CBDCs is well grounded to expand the horizons of control of individual funds. This is to say that with CBDCs, individuals only bear the name as owners of asset but they have limited control over their funds.
CBDCs positions central bank on both the vertical and horizontal control over funds where they can execute account freezing, tweak the account balance of individuals, and then limit the amount of inflows into the account holdings.
Currently two countries which are Bahamas and Nigeria have released their own CBDCs already so they could enact the strength of the monetary policy they've imposed on every account holding.
But if CBDCs can help keep inflation in check, must it be at the detriment of financial privacy and financial autonomy of the common man?
According a news I read days ago, I learnt the main purpose of CBDCs coming to existence in the central banks of most countries was to help in shielding their currencies from the ardent policy of other developed countries, particularly the United States of America whose national currency is the reserve currency of the world.
In the near future, I feel this CBDC will be targeted to dissipate the existence of Cryptocurrency but I do not see any success outcome of that as the probability of that is highly abortive.
What's your view about Central Bank Digital Currencies?
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