Bank of America says CBDCs could “revolutionise the global financial system”

The latest research from the Bank of America pointed out several supportive facts in favour of CBDC.

At present, more than 100 Central Banks are working on the Central Bank Digital Currency (CBDCs). All the dominant Central Banks want to modernise their existing traditional payment system with the use of blockchain technology. In recent months, many countries’ Banks shared the issue associated with the CBDC implementation. 

Alkesh Shah, an analyst lead at Bank of America (BoE), published a research note on CBDCs. The research mentioned that CBDC is a natural evolution of traditional technology & the future of money will rely on CBDC’s dominance. Report noted that CBDCs have the potential to “revolutionize global financial systems and may be the most significant technological advancement in the history of money.” 

As we know, recently Tanzania Central Bank released a public note over the national CBDC rollout plan’ related challenges and noted that there exists a risk of the “dominance of cash” because of CBDC. 

Here research confirmed that CBDC will not change the definition of fiat currency, instead, it will give a better flow for the money value over the next 15 years. 

Further research pointed out some of the potential risks associated with CBDCs, as per experts. Research noted that the majority of the Central Banks will try to bring an efficient & low-cost CBDC model but it will bring some big challenges and one of the big challenges is downfall in the dominance of the role of the central bank in the payment system. 

Research also noted that the next 10 years will not be sufficient for all the Central Banks to introduce their CBDC but the majority of the Central Banks will work on the enhancement of the CBDC payment system, otherwise they will move toward a  “risk irrelevance over the longer term.”

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