Central Banks are now Moving to Adopt Blockchain Technology to Start their Version of Digital Currencies
It has been seen in cases of many countries that they are at odds with the digital asset markets at first. However, almost all national and federal monetary agencies were unable to ignore the importance of blockchain technology and digitized economy. It is estimated from reports and surveys that about 90% of state and central banking authorities are thinking about starting a personalized token. The term widely used for the fully centralized version of digital assets is central bank digital currency or CBDC.
There is an impression among crypto proponents that if more CBDCs enter the market, the effects on the DeFi circle could be devastating. Bank of International Settlements or (BIS) recently conducted a survey that shows that a good number of CBDCs can be introduced in the market in the next few years. The main objective of central bank authorities seems to be adapting to the latest technological advances and restoring the public faith in fiat.
At present, when there are about 4000 variants of decentralized cryptocurrencies, a lot of investors are not sure about how to approach this new market. There is not enough data for the most trained stockbrokers and hedge fund managers to ascertain which way the market would sway. Under these circumstances, the sword of prosecution and ban from federal entities is always hanging over the heads of crypto proponents.
However, an expert like Meltem Demioros, CSO at CoinShares, opines that the emergence of CBDCs would provide relief and support for the crypto market. Talking to journalists at Reuters, he remarked that technically a CBDC has much more in common with fiat. They would be a great product to complement the standing crypto market. Executive of Delphi Digital, Kevin Kelly, also believes in the peaceful coexistence of the CBDCs and fiat currencies. He further added that introduction of CBCDs could pave the way for the evolution of fiscal policies for economies.
Not All Experts have a Positive View about the Introduction of Central Bank Digital Currencies
A dominant number of crypto proponents support the idea of digital assets introduced by central banks. A significant amount of stakeholders think that it is not such a great idea. Todd Cipperman is the founder of Cipperman Compliance Services (CCS). According to him, the priority of the nations would be to put cryptocurrencies on the back burner and ensure that their versions get the best chance at winning.
According to Cipperman, it is a big possibility that the government put into effect such policies and tax laws that favor the regional CBDC over others. He presented the United States example and claimed that the federal agencies had shown the same behavior in the past. The governments like China and Nigeria have created legal roadblocks for DeFi currencies and later on make more room for a nationalized version of digital assets under their jurisdiction.