Countries around the world are looking forward to creating their own CBDC. CEO of HashCash Consultants, Mr. Raj Chowdhury highlights the need for a balance between surveillance, and user privacy.
The majority of countries today are involved in developing their own Central Bank Digital Currency development projects. To facilitate instant money transfers, CBDCs utilize the underpinned technology of cryptocurrencies, the blockchain technology to make transaction costs cheaper, and the asset values remain intact as they are backed by the government. CEO of HashCash Consultants, Mr. Raj Chowdhury, highlights the potential of CBDCs and also acknowledges the dangers of centralized storage of CBDCs.
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The Concept of CBDC & its Global Adoption
The concept of CBDC is revolutionary in its design and is leading to the complete dematerialization of fiat money. The digital currency will perform and facilitate all the functions that one normally expects from money and acts as a mediator of exchange, settling transactions, and debt. Research projects on the digital tokenization of cash backed by the central banks of different countries are ongoing around the world, with China being one of the leaders. Some of the other countries that are currently undergoing CBDC development or using it are the EU, Bahamas, Russia, Nigeria, and more.
CEO Speaks
Notable blockchain pioneer and CEO of HashCash Consultants, Mr. Raj Chowdhury, “CBDC projects need to address their drawbacks and act considering the potential side-effects. They may lead to the disintermediation of the nation’s banking sector, and lend the government an upper hand in state-sponsored censorship of a citizen’s spending patterns.”
The global crypto community members have protested against the dangers of CBDC, however, the government is blindly continuing the development of CBDC. moreover, the strict rules and taxation on cryptocurrency return investors from retail to invest in digital assets. In the meantime, a recent report of a survey says almost 60% of the world’s top business enterprises are already utilizing digital currencies in one form or another, mainly for transaction settlement and payments.
“The working principles of CBDC are converse to the ideals behind Bitcoin and blockchain technology. A centralized storage system has grave security risks, which will likely diminish the anonymity and privacy normally associated with conventional cash or crypto transactions,” stated Chowdhury. He has previously highlighted how blockchain can transform sustainable energy management, and the need to upgrade the infrastructure for crypto investigations.
In Conclusion
While the trending CBDC development guarantees utilizing blockchain technology, there are several issues and limitations that the nations must take into consideration. Keeping the scalability issues aside, the top central banks must conduct extensive research before proceeding any further.
