Central bank digital currency (CBDC) is a digital currency backed by a country's government they are considered legal tender for local and international transactions, the quest for a cashless policy system to provide widely distributed financial services for local and Urban users to have accessibility to a robust finance banking system is one of the aims behind the idea of CBDCs, Central banks around the world are unveiling digital currencies that will be used to boost business interaction between users in different countries.
CBDCs other aims are to
Improving user's banking experience.
Simplifying monetary policy.
Be a centralized accepted legal tender digital currency backed by governments.
Resilient against cybercrime.
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What's happening behind the scene
With cryptocurrencies continuing to thrive despite unfavorable regulatory policies limiting enormous adoption of users diving into the crypto space due to fear of uncertainty and doubt about crypto regulations, CBDCs are introduced to compete with decentralized currencies they are the opposite of what decentralization is built on.
Privacy problem
CBDCS; as cool as this digital currency are, they will have monopoly over users transactions, lack of privacy in transaction will be a limitations around this centralized currency, unlike decentralized currencies that gives users anonymity CBDCS offers quite the opposite to users.
Circulation problem
Bitcoin will have a capped 21 million supply this will be a hedge against inflation, CBDCS will be like the normal fiat cash that has unlimited supply which will only increase circulation of fiat currencies in general it's does not provide solution for current inflation problem today.
Introducing a centralized digital payment system that will easy users means of interacting with local banks is a good initiative, only problem here is what are the core motives behind CBDCs are they here to limit the adoption of decentralized currencies or they will they be the real cryptocurrencies killer?
Seems we will still be in the same old circle with CBDCS around there's no guarantee we will having our assets to ourselves without been monitored on every penny is spent.
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CBDCs are going to be an epic failure. They are very overrated and people do not realize how they are already impotent.
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Without government backing CBDCs will be just another hype project, decentralization will continue to lead, being people's choice, glad more users are now getting catch behind what CBDCS are built on.
In recent months there is a boom in countries where central banks are introducing digital currencies, this may be positive but I have my doubts. Thanks @mccoy02 for sharing this kind of content.
Thanks for stopping by, CBDCs aren't so bad as they seem they have their good and bad sides.
I suppose one positive could be that a greater number of people would become comfortable with the idea of "non-physical money" and might serve — at least to some — as a bit of a "gateway drug" into actual decentralized crypto.
Aside from that, I'm not sure what potential value they really bring to the world. But let's keep in mind that most of us around here are crypto maximalists, and sometimes get a bit myopic in terms of only being able to see the world through OUR lenses of perception...
=^..^=
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I concur with your point of view, CBDCS will drastically limit use of physical cash increasing cashless policy.
On that note seems we are clog up to see the good side of the centralized currency for now let's wait for major countries to launch their own digital tokens so we can see how things will unfold.
In a country like hours with the government always trying to control users and the regulation of money, it can never be a good thing.. decentralization promises discretion and a certain amount of safety that CBDC cannot be allowed to offer...let's just hope it doesn't affect Crypto
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I guess CBDCS are here to slow crypto adoption definitely it's will try to affect crypto, in the end decentralization will prevail.
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