Intense interest in cryptocurrencies and the Covid-19 pandemic have sparked a debate among central banks over whether they should issue their own digital currencies.
China has been at the forefront of developing its own digital currency. He has been working on the initiative since 2014. Chinese central bank officials have already conducted massive tests in major cities such as Shenzhen, Chengdu and Hangzhou.
“China’s experiment is large-scale,” said J. Christopher Giancarlo, former chairman of the U.S. Commodity Futures Trading Commission. “When the world arrives in Beijing next winter for the Winter Olympics, they will use the new digital renminbi to shop and stay in hotels and buy food in restaurants. The world will see how it works. [central bank digital currency] very soon, next year “.
The United States is catching up. In late February 2021, Fed Chairman Jerome Powell said that this year the United States will work with the public on the digital dollar.
Proponents argue that central bank digital currencies can facilitate cross-border transactions, promote financial inclusion, and provide stability to the payment system. There are also privacy and surveillance risks with digital currencies issued by the government. And in times of economic uncertainty, people are likely to withdraw their funds from commercial banks, speeding up their bank management.
Watch the video above to find out how central bank digital currencies can become the future of global finance.