CBDCs might not be so central after all.
Digital currencies, until quite recently, were seen as the payment tool of the dark webs of the Internet. If not redirected to the mainstream payment protocol of a Visa or a MasterCard, or picking a payment partner that acted as a mere digital wallet of fiat, the average everyday customer would not trust a payment gateway. Now, it seems like digital currencies are coming into the mainstream.
Both private and public entities are gunning for a digital currency, with Facebook and China at the fore. Given that the game rests on regulatory approval, the latter is, quite evidently, speeding ahead, with IBM stating that a retail CBDC could be issued in the next 5 years based on responses of global central bank officials and regulators that were surveyed.
In a report jointly conducted by the New York-headquartered IT giant and the Official Monetary and Financial Institutions Forum [OMFIF], cash might be on its way out, substituted by a central bank-backed digital currency, representing the fiat. While the prospect of a CBDC is no surprise given the reports coming out of China stating that a digital yuan has been in development for over a year, most central bankers are of the opinion that a CBDC might not be completely central.
This doesn’t mean to say that CBDCs won’t be centralized. Private players may get a handout.
64 percent of the respondents, which included high-ranking officials from 23 central banks [13 advanced economies and 10 emerging markets], stated that private companies assist issuing banks with functions like onboarding, security, and distribution. The report read,
” As some respondents to our survey suggested, private companies could fulfil important intermediate services,