CBDC to open new era in global financial industry
Fresh ideas frequently pop up in the crypto industry, but their implementation is complicated under the new post-pandemic reality. Experts say that one of such ideas is the concept of digital currencies developed and issued by a government and the prospects of their introduction.
A central bank digital currency (CBDC) is the digital form of fiat money issued by a particular global central bank. CBDC has a legal tender status. Hypothetically, such digital currencies can be used for all types of payment transactions. According to the IMF, pilot projects with virtual money have been launched in Sweden, Uruguay, China, the Bahamas, and the countries of the Eastern Caribbean Currency Union.
Kai Sheffield, the head of Visa’s cryptocurrency division believes that central bank digital currencies are one of the most important trends in the crypto industry. He thinks they will set the tone in the payment industry for the next decade.
From Kai Sheffield’s viewpoint, the global economy will somehow depend on the stance adopted by monetary authorities towards CBDC development. If e-money is introduced in the global system of fiat money, this move will open a new era in the global financial industry.
In case CBDCs become a full-fledged payment means, this prospect will impact on the attitude towards bitcoin. The launch of the crypto dollar will be the next logical move, Kai Sheffield says.
The Bank for International Settlements (BIS) shares this outlook. Experts at the BIS consider CBDCs the next stepping-stone in the evolution of payment systems.