COVID-19 will pave the way for CBDCs

[Lucius]

As long as there are old people using physical cash, the idea of a CBDC will take longer than usual to become adopted by everyone in the mainstream world. Governments would need to slowly introduce the new payment system to the world, while phasing out physical cash from existence. A great level of education is needed for people to understand how to perform digital payments more thoroughly. While credit/debit cards have existed for a very long time, they aren't as efficient as a digital currency is.

As far as I know, Sweden is a country where 98% of all transactions are already done without cash, so I don't think it would be difficult to map this model to other European countries. I don't see that it would be difficult to implement a full cashless payment, just give all people cards and replace all cash with digital version of fiat. It may not be as simple as it may seem at first glance, but it all depends on how much the banks will be interested to move in that direction.

With a CBDC, governments can cut costs and increase efficiency with the power of Blockchain technology. Central banks are slowly beginning to realize that it is no longer worth printing physical cash for circulation. After all, physical cash is harmful to the environment in every way. Not to mention, they serve as carriers of germs and bacteria increasing the risk of contagion from the COVID-19 pandemic. Focusing entirely on digital payments seems to be the way of the future.

The truth is that printing money requires a large amount of resources, there is certainly room for savings. There is also the question of counterfeiting money, will CBDC solve this problem as well as completely leaving in the past the possibility of physical robbery? Or hackers will find ways to steal digital money from people in a same way they are doing today with BTC and altcoins?

[Abiky]

As far as I know, Sweden is a country where 98% of all transactions are already done without cash, so I don't think it would be difficult to map this model to other European countries. I don't see that it would be difficult to implement a full cashless payment, just give all people cards and replace all cash with digital version of fiat. It may not be as simple as it may seem at first glance, but it all depends on how much the banks will be interested to move in that direction.

Interesting fact. Sweden could be one of the first countries to adopt a CBDC within the mainstream world. That's largely because people are accustomed in paying digitally than using physical cash for their purchases. As countries begin to develop their own CBDCs, it'll only be a matter of time before everyone in the world starts conducting payments digitally without the need for physical cash. The first country to launch a CBDC, will be the one leading the world's economy in my own opinion. I think that China was the first country to announce a CBDC, so this should encourage the US to launch its own digital dollar in the least time possible. After all, the US wouldn't want its internal Fiat currency (USD) to lose its position as the reserve currency of the world.

With the transition of physical cash to a CBDC, physical credit/debit cards might as well cease to exist in the future. Contactless payments will be the norm where everyone can pay using their computer or mobile device without the need to interact physically with a cashier. In the online world, you can use digital Fiat directly without the need for a credit/debit card. We still don't know if governments will be using Blockchain technology for their own CBDCs. But looking at how successful Bitcoin has been over time, it looks very likely that its core technology will be used for the world's monetary system sometime in the future.

The truth is that printing money requires a large amount of resources, there is certainly room for savings. There is also the question of counterfeiting money, will CBDC solve this problem as well as completely leaving in the past the possibility of physical robbery? Or hackers will find ways to steal digital money from people in a same way they are doing today with BTC and altcoins?

The risks of hacks and theft will always be there no matter how secure a Blockchain network is against external attacks. For what I know, nothing is perfect. In all the years Bitcoin has been used as a currency for daily payments, it hasn't experienced a single hack that would disrupt its entire network. Maybe governments' own Blockchain networks will have a massive hashrate and nodes worldwide to protect against a 51% attack? As long as they have some sort of "fail-safe mechanism", nothing should go wrong. It's time to change to a new monetary system for the 21st century. Physical cash and credit/debit cards will be no more as we shift into the digital realm. Not everyone will find it easy to switch into completely digital payments, but they will as governments slowly introduce their CBDCs to the public. Just my thoughts

[tvplus006]

...Considering that everything has been moving to the "online world" lately, I believe that the coronavirus pandemic will pave the way for CBDCs (Central Bank Digital Currencies) quicker than we've expected. After all, it'll be much safer to conduct transactions online (and eco-friendly too) than doing so in the physical realm. Crypto will rise like never before because of this, leading towards the accelerated development of CBDCs.
...

I don't think that COVID-19 will speed up the transition from cash to national digital currencies in any way. After all, even now there is a parallel with cash - their non-cash form. And recently, more and more payments are made using credit cards, in addition, Visa and Mastercard also support noncontact technology.

[Lucius]

Interesting fact. Sweden could be one of the first countries to adopt a CBDC within the mainstream world. That's largely because people are accustomed in paying digitally than using physical cash for their purchases.

When we consider their level of development, not only the economic, but also the sense of how their thinking is shaped, they are very likely to be the first country to become a cashless society. A truly special country, even when almost all the world is quarantined, they keep schools open, restaurants and cafes are packed with people, and they send a message to the world not to put people over 80 on the respirators (which shows that they do not experience death in the same way as the others).

Contactless payments will be the norm where everyone can pay using their computer or mobile device without the need to interact physically with a cashier.

I remember reading a few months ago that there is a service in China that allows you to connect your bank account with your face, and only pay by face scan. Imagine not having to carry your wallet, mobile phone or card, remember your PIN, and that all you need is your smile? Well it's not SF anymore, it's happening in China and it's working.

At the IFuree self-service supermarket in Tianjin, a 3D camera scans the faces of those entering the store – measuring width, height and depth of the faces – then another quick scan again at check-out.
“It’s convenient because you can buy things very quickly,” says retiree Zhang Liming after using facial payment for her groceries. “I don’t even have to bring a mobile phone with me, I can go out and do shopping without taking anything,” says Bo Hu, chief information officer of Wedome bakery, which uses facial payment machines across hundreds of stores.

What is important to emphasize is that such things are much easier to implement in countries like China, because the state has mechanisms that put things in their place without asking ordinary people what they think about something. Western civilizations, however, have some kind of apparent democracy in which the people decide, so any radical change will go very slowly.

[jacafbiz]

Unless we are not being relist the Central bank digital currencies is inevitable, we see the progress China has made iwth their own. The issue is that people should not compare this to the public blockchains we have in the space because they are not, you won't be able to verify their data

[FanEagle]

Do you guys seriously think that CBDC somehow will become more like stablecoins? I mean there is no way they would turn into stablecoins at all, they will definitely be just the digital form of the fiat currency and that would be the end of it, it will not be some sort of coin or a token or anything that uses blockchain at all, it will definitely be just a fiat thing that is ones and zeroes on some bank and that's it, nothing more.

Literally the same thing as you having money at the bank and using their cards to spend your money, you think your money is there, everyone thinks the same, and more often than not you can actually go and withdraw all of your money, however when it comes down to everyone withdrawing all at the same time bank wouldn't be capable of giving that, which means money is mostly digital there as well.

[Sanugarid]

Do you guys seriously think that CBDC somehow will become more like stablecoins? I mean there is no way they would turn into stablecoins at all, they will definitely be just the digital form of the fiat currency and that would be the end of it, it will not be some sort of coin or a token or anything that uses blockchain at all, it will definitely be just a fiat thing that is ones and zeroes on some bank and that's it, nothing more.

If this digital coin in the future won't come with blockchain then it has no point to use at all, and I don't think government does not see this fraction of mistake to implement. I don't think fiat will be replaced by this, in most probable case, digital currencies will be backed by fiat currency for it not to be so volatile and literally stablecoin. I know there are several countries that is taking experiment on it, I've read the tokenization experiment by the Russia.

[chip1994]

In times where social distancing is a must, the way we make payments changes in its entirety. Physical cash will cease from existence, as they serve as "carriers" or "vehicles" of the deadly coronavirus "COVID-19". Governments will notice that printing more money will not be worth their time, leading them towards the creation of their very own digital currency. That is if the pandemic continues extends long enough in order to have a negative impact on the world's economy.

What are your thoughts? Will this be the era of CBDCs? Or is it still too early to tell?

CBDC is really a good idea, but if it is made available to the general public, it will implement a separate mechanism that is understood only by people working in government agencies. Do you think that the world's governments' digital currencies will be listed on Coinmarketcap or the crypto market? are not ! That is not possible. Cryptocurrencies are just one of the short-term solutions, and fiat money is one of the most manageable currencies. it can cause inflation, but we still have many ways to fix it and the bull will reappear. My advice is not to expect blockchain technology to have a future.

[Baofeng]

...Considering that everything has been moving to the "online world" lately, I believe that the coronavirus pandemic will pave the way for CBDCs (Central Bank Digital Currencies) quicker than we've expected. After all, it'll be much safer to conduct transactions online (and eco-friendly too) than doing so in the physical realm. Crypto will rise like never before because of this, leading towards the accelerated development of CBDCs.
...

I don't think that COVID-19 will speed up the transition from cash to national digital currencies in any way. After all, even now there is a parallel with cash - their non-cash form. And recently, more and more payments are made using credit cards, in addition, Visa and Mastercard also support noncontact technology.

China is already on a transition: First Glance of China's Digital Currency so we're closer than we think. Yes, we still has Visa and Mastercard at the sideline, but these CBDC's will be the next alternative coming from the government. Of course, there will be a lot of cros and pros, but with the recent pandemic, their use case multiple by many factors that's why government's are quickly trying to go live on at least on the testing phase of their CBDC.

[Findingnemo]

I feel like governments are already making their move towards creating their digital form of cash and corona is great opportunity for them to inject more digitally printed money so they can reduce the printing costs as well but I don't think they have necessity to create their own centralized version of cryptos since it will be no more different from the fiat money in digital form.

[fiulpro]

Instead of this I do think one needs to remember that not every country is fortunate enough , the digital currencies and online transactions are still very weird for some people who are just trying to survive , the one's who cannot even afford to buy a smart phone . The government need to take these things into consideration before doing something like this , one needs time to do something like this , I did read comments on the USA digital currency where they mentioned how they are going to present the currency in like 3 years .
All the governmental process takes time and one has to even think about everyone or provide a basic tutorial for people about how to use it .
At the same time one can actually remember that "there are an estimated 1.1 billion people in the world who don't have access to electricity, meaning charging a phone, let alone owning one, would likely be difficult." .(taken from Google)

[Twentyonepaylots]

I feel like governments are already making their move towards creating their digital form of cash and corona is great opportunity for them to inject more digitally printed money so they can reduce the printing costs as well but I don't think they have necessity to create their own centralized version of cryptos since it will be no more different from the fiat money in digital form.

I've read some article a while ago that there are countries that is developing their own currency digitally. Fiat currency is strong however the digital currency is sweeping it away using innovation. China has been very positive with using digital currencies, their central bank is considering to create their own to prevent fiat based transactions which this time is very dangerous because of the virus. Some countries in Europe and Russia is designing their own CBDC.

[Abiky]

Do you guys seriously think that CBDC somehow will become more like stablecoins? I mean there is no way they would turn into stablecoins at all, they will definitely be just the digital form of the fiat currency and that would be the end of it, it will not be some sort of coin or a token or anything that uses blockchain at all, it will definitely be just a fiat thing that is ones and zeroes on some bank and that's it, nothing more.

Literally the same thing as you having money at the bank and using their cards to spend your money, you think your money is there, everyone thinks the same, and more often than not you can actually go and withdraw all of your money, however when it comes down to everyone withdrawing all at the same time bank wouldn't be capable of giving that, which means money is mostly digital there as well.

No one knows how a CBDC will turn out to be when launched. Governments could simply use Blockchain technology or a centralized database of their own. I think they'll use Blockchain tech for this purpose, considering their level of interest in the same after Bitcoin came into inception a long time ago. They can have their own private blockchain network where central banks act as "miners", "stakers", or "validators" of the same. Governments will simply run nodes in order to support the centralized blockchain network. No one from the outside will be able to build/develop on it, neither browse transactions performed on-chain. Since it'll be a permissioned chain (rather than permission-less like Bitcoin or Ethereum), central banks and governments will have full control over people's money. This is even worse than physical cash or credit/debit cards, since every single transaction can be easily manipulated at will by said entities with the power of Blockchain technology. Privacy will be a thing of the past in the new digital money system backed by governments worldwide.

I've seen somewhere that China has already been testing a digital wallet for its own CBDC. There are pictures across the web, showing a concept of the wallet's interface. It seems that China is serious in launching a digital Yuan to the world. It'll only be a matter of time before other countries follow. The COVID-19 pandemic has accelerated the development of CBDCs as we speak. The more people practice social distancing, the less physical cash/banknotes will be used in the mainstream world. This will further encourage governments to start launching CBDCs for the whole world to use. Believe it or not, CBDCs will be the future of the worldwide economy. Just my opinion

[exstasie]

The Dutch central bank becomes the next to announce planned testing of CBDCs. https://cointelegraph.com/news/dutch-central-bank-ready-to-play-a-leading-role-with-digital-euro

The Dutch central bank wants to be the proving ground for central bank digital currencies (CBDCs) in the European Union.

In a 45-page report released by the bank on April 21, the De Nederlandsche Bank (DNB) said it was “ready to play a leading role” with research and development into its own digital currency as well as a Europe-wide digital currency.

As far as the underlying motivation goes:

Though not the primary target of the report, the DNB singled out cryptocurrency Libra as a possible threat to monetary stability and conceded it was “the reason why the DNB and other central banks are now considering issuing their own digital currency.”

It's obvious which way the winds are blowing now. China, EU, UK, and the US are all moving towards CBDCs behind the scenes.

[LeGaulois]

The Dutch central bank becomes the next to announce planned testing of CBDCs. https://cointelegraph.com/news/dutch-central-bank-ready-to-play-a-leading-role-with-digital-euro

The Dutch central bank wants to be the proving ground for central bank digital currencies (CBDCs) in the European Union.

In a 45-page report released by the bank on April 21, the De Nederlandsche Bank (DNB) said it was “ready to play a leading role” with research and development into its own digital currency as well as a Europe-wide digital currency.

As far as the underlying motivation goes:

Though not the primary target of the report, the DNB singled out cryptocurrency Libra as a possible threat to monetary stability and conceded it was “the reason why the DNB and other central banks are now considering issuing their own digital currency.”

It's obvious which way the winds are blowing now. China, EU, UK, and the US are all moving towards CBDCs behind the scenes.

Did you notice the report is talking about a national digital currency AND a European one? I started to wonder if the country is maybe planning to come back to the national currency without leaving the Euro money. In this case, they may use EUR only for Intra-European payments and the Dutch coin for the national payments

If they do it, there are some other countries that will do the same for sure. It would be nice, many of us in Europe regret a lot ours old national money since the Euro. The end of this stupid European centralization, yahoo!

There are a lot of more central banks working on CBDCs, so yeah no doubt we know what to expect now


https://www.theblockcrypto.com/linked/51526/at-least-18-central-banks-are-developing-sovereign-digital-currencies

[Abiky]

The Dutch central bank becomes the next to announce planned testing of CBDCs. https://cointelegraph.com/news/dutch-central-bank-ready-to-play-a-leading-role-with-digital-euro

The Dutch central bank wants to be the proving ground for central bank digital currencies (CBDCs) in the European Union.

In a 45-page report released by the bank on April 21, the De Nederlandsche Bank (DNB) said it was “ready to play a leading role” with research and development into its own digital currency as well as a Europe-wide digital currency.

As far as the underlying motivation goes:

Though not the primary target of the report, the DNB singled out cryptocurrency Libra as a possible threat to monetary stability and conceded it was “the reason why the DNB and other central banks are now considering issuing their own digital currency.”

It's obvious which way the winds are blowing now. China, EU, UK, and the US are all moving towards CBDCs behind the scenes.

This is some progress. It seems that countries worldwide are advancing to bring CBDCs to the masses. Especially now, when it's not safe to conduct transactions with physical cash due to exposure to COVID-19. With a fully digital currency, even physical credit/debit cards might cease to exist. Everything is shifting to the digital realm as we speak. The coronavirus pandemic will definitely accelerate the development of CBDCs and people will get used to the online world. Once everyone becomes interconnected, a whole new wave of possibilities is opened. One way or another, people will be forced to use a government-issued digital currency as physical cash will be phased out by central banks worldwide. I know it'll be hard for old people to get used to paying electronically at any store or retailer, since they've been accustomed to physical cash for a very long time. But I believe that adoption for CBDCs will increase slowly until everyone uses them massively for daily payments.

Now that major countries are beginning to work on CBDCs of their own, it should only be a matter of time before they start rolling them out for people in the mainstream world to use. Maybe China will be the first country to launch a CBDC? Or maybe it's the US? I believe that the first country to do this, will gain a major advantage in the world's economy. The US should adopt a digital dollar ASAP if it wants the "USD" to remain as the reserve currency of the world. Otherwise, it'll be left behind other countries with newly-adopted technologies that are bound to transform the worldwide economy. Just my opinion

[figmentofmyass]

there's been lots of mention from central banks about private stablecoins---not coronavirus---as the reason for the accelerated push towards central bank-issued digital currencies.

the Bank of International Settlements (BIS) is the first i have noticed who seems to be citing the coronavirus as the basis for a rapid shift towards such digital payment rails. earlier this month, they released this report: Covid-19, cash, and the future of payments

Resilient and accessible central bank operated payment infrastructures could quickly become more prominent,  including  retail  central  bank  digital  currencies  (CBDCs).  Such  infrastructures  would  need  to  withstand a large range of shocks, including pandemics and cyber attacks. Auer and Böhme (2020) lay out potential  architectures  for  resilient  CBDC  and  technological  options  allowing  for  broad  acceptability.  In  the context of the current crisis, CBDC would in particular have to be designed allowing for access options for the unbanked and (contact-free) technical interfaces suitable for the whole population.  The pandemic may hence put calls for CBDCs into sharper focus, highlighting the value of having access to diverse means of payments, and the need for any means of payments to be resilient against a broad range of threats.

and last week, this: BIS Innovation Hub Head: COVID-19 Has Exposed The Value of DLT

“The current discussion on central bank digital currency also comes into sharper focus. Whether Covid-19 will accelerate the demise of cash is an open question. But already, it highlights the value of having access to diverse means of payments, and the need for any means of payments to be resilient against a broad range of threats.”

whether or not the central banks are directly referencing the coronavirus pandemic in their reports, it will probably be a significant accelerating factor moving forward. i'm not sure what that means for bitcoin exactly.

[tvplus006]

As long as there are old people using physical cash, the idea of a CBDC will take longer than usual to become adopted by everyone in the mainstream world. Governments would need to slowly introduce the new payment system to the world, while phasing out physical cash from existence. ...

I don't see any difference between using the national digital currency and a payment card. The difference in the use of CBDC and credit cards will not even differ in the calculations. But of course CBDC is more profitable for the government from an economic point of view.

[TheGreatPython]

What are your thoughts? Will this be the era of CBDCs? Or is it still too early to tell?

Can you even prove what you have said? That people are practicing social distancing doesn’t mean that they will go for cryptocurrency, there are also other types of payment that people are making use of and they are all digital payments, it’s not just about cryptocurrency.

Where I live, most people are now making use of their banking apps when they want to make payments and some are making use of PayPal. I don’t see anyone that’s making use of cryptocurrency as a payment method; I know there are, but they are just few compared to the number of those that are making use of other payment methods

[Abiky]

I don't see any difference between using the national digital currency and a payment card. The difference in the use of CBDC and credit cards will not even differ in the calculations. But of course CBDC is more profitable for the government from an economic point of view.

CBDCs could increase efficiency and reduce costs at every level. With them, there will be no need for credit/debit cards or even physical cash. Instead, governments will act as direct custodians of your money. Payments will be performed directly from one person to another without the need to go through a payment processor like VISA or Mastercard. The network will be entirely backed and operated by a central bank and the government itself.

As COVID-19 encourages people to practice social distancing, they'll become used to making digital payments in the online world. This will accelerate the development and launch of CBDCs more than anything else. Before COVID-19, it was announced that some countries will begin testing CBDCs. But the level of interest back then, was not the same as it is right now. China could be the first country to launch a CBDC, leaving the US in the dust. I hope it doesn't end this way, as it'll truly remove the US Dollar's place as the reserve currency of the world. If the US wants to stay ahead of the game, it'll need to approve the development of a digital dollar ASAP.

No matter how long it takes for people to begin using CBDCs, we cannot deny the fact that physical cash will be a thing of the past. We'll live in a future where CBDCs and cryptocurrencies will live alongside each other for many generations. The world's economy will be truly digital like never before. Salaries will be paid in digital money, while goods can be purchased with it. And all of this can be done with a computer or mobile device without the need to carry a wallet with you. COVID-19 will truly change our lives as it brings innovation to many of the world's industries. Our economy will never be the same as it was when physical cash was used by many people worldwide. Just my opinion