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- Cryptocurrency finds increasing adoption across the globe
- Better safety, privacy, very low transaction charges, and bundling effect makes cryptocurrency a candidate for becoming a global currency
- Central Banks will lose their dominant role in enforcing financial order
Cryptocurrency is gaining increasing acceptance across the globe. However central banks have not been idle and all across the globe feasibility is being conducted about digital currencies. A recent study by the EU Bank reports that countries that do not issue CBDCs or a central bank are at grave risk.
The EU Union is lagging behind other nations like China Korea, and the US when it comes to CBDC. The ECB is sounding a red alarm and warning governments that monetary control is being usurped by cryptocurrencies. Cryptocurrency offers better safety, privacy, very low transaction charges, and bundling effect which makes it an ideal candidate for becoming the global currency of the future.
EU is falling behind in the CBDC race
The EU is falling behind in the CBDC race. A report issued by the European Central Bank (ECB) On Wednesday, June 2nd underlined the threat to the monetary regulation of countries that decide against the CBDC’s.
The International Role of the Euro was the title of the report which hailed the stability which elevated the Euro to become the second most widely used currency after the US dollar. However, the focus of the report was the risks of EU member countries that may decide against CBDCs. In such a situation the foreign digital money could inundate the market forcing governments to leapfrog the adoption of a digital Euro
Dangers of tech giants who will push forth their cryptocurrencies
The rise of the Digital Euro could be influenced by several factors. This includes the decline in the use of cash in the euro area or worse foreign digital money was to largely displace existing domestic currency means of payment. The report also talked about the dangers of tech giants who will push forth their cryptocurrencies. This could become a reality because several large foreign tech giants have pushed forth their cryptocurrencies. It includes Facebook’s Diem coin, Binance Coin, and Amazon (NASDAQ: AMZN), etc. All these major tech giants are reportedly considering their digital currency.
Another dangerous situation that was pointed out is when foreign tech giants potentially offer artificial currencies which will be used in domestic and cross-border payments. In such a situation individuals and merchants would be vulnerable to a few dominant providers with strong market power. This will affect financial stability and also erode the ability of central banks to fulfill their monetary policy mandate.
Andrew is a blockchain developer who developed his interest in cryptocurrencies while pursuing his post-graduation major in blockchain development. He is a keen observer of details and shares his passion for writing, along with coding. His backend knowledge about blockchain helps him give a unique perspective to his writing skills, and a reliable craft at explaining the concepts such as blockchain programming, languages and token minting. He also frequently shares technical details and performance indicators of ICOs and IDOs.
