Davos 2023: CBDCs are the Future of Central Bank Money But They’re Not Ready Yet
A central bank digital currency panel that is part of the World Economic Forum (WEF) Davos meetings has stressed that it has high hopes for central bank digital currencies in the future of central bank money and proposed Could Including Julio Velarde, Governor of the Central Bank of Peru, Lesetja kganyago, Governor of the Reserve Bank of South Africa, and Amir Yaron, Governor of the Central Bank of Israel, among other central bankers, this panel focused on the many potential benefits of this financial instrument and that these may exist but he also highlights the difficulties in implementing them efficiently.
Governor Velarde explained that in his opinion the central bank digital currency is definitely emerging as a solution for payment and credit and that goes beyond banking aggregation. It is for them to set the standard for the central bank in manufacturing these instruments and to form a private bank, as well as to establish the financial inclusion of those who are still outside the traditional banking system. also say we learned this the hard way that there is going to be a revolution from central banks and we don’t know how central bank currency will be implemented but we are keeping an eye on what will happen for the world.
Governor Amir Yaron explains that payments are now at the forefront of financial markets, and that is why the central bank is currently interested in it. For Yaron, a CBDC could serve as a transitional function between the digital world and private institutions. He further says that fast payments, smart contracts, electronic money and crypto assets and stable coins are getting their attention and that central bank digital currency is a public good that can be fulfilled but some of these things are not there. can make out. Central bank digital currency can act as a bridge between the new digital economy and the standard economy. Israel of course is experimenting with central bank digital currency as a part of its central bank project Ice Breaker as well as cross-border central bank digital currency between Israel and countries like Norway and Sweden in cooperation with the International Central Bank. Includes pay-as-you-go payments. For Governor Kganyago, with more than 100 banks globally studying CBDCs, the main issue remains the same and bridging the digital divide associated with the newest form of money, and with the money currently issued by central banks. Growing as an alternative. Certainly it is a modernization of the payment system. Its meaning movies recognize that the environment is changing and according to some central banks they need to go through with it and introduce this digital option.
For Kganyago, last of all there is a need for a national discussion on the demand side where the larger issue pertains to public choice on the use of central bank digital coins and concluded them by explaining that central bank digital currency for national and cross-border payments Whatever problems are being faced in the implementation of NSA and its overall security system will be more on the regulatory side than on the technical side as they will need to follow the rules of many jurisdictions of the world.