Bank of America Believes Stablecoins, CBDCs Will Change the Dynamics of Money in the Future
Bank of America (BOA) is convinced that Stablecoins and CBDCs are here to change the dynamics of the whole concept of money and the economy of the world in the future.
Monetary System Development
This report made by the BOA states that these digital forms of money can completely revolutionize the way we look and think about money, providing more benefits that include seamless transactions, efficiency, and security.
Stablecoins are virtual currencies that are pegged to a stable asset. They are unlike other cryptocurrencies because they are less volatile and more stable.
This makes them a better and more likely option when saving and performing business operations.
CBDCs, on the other hand, are digital forms of a country’s native currency.
They are issued and backed by a country’s central bank, meaning there is a more reliable source of a country’s native currency, being that they are in a digital form.
They also provide the benefits obtained from stablecoins which consist of increased efficiency, security, and seamless transactions.
According to the BOA, these digital forms of currency can change the dynamics of banking and change the perspective on money.
Stablecoins are useful when it comes to international transactions, however, CBDCs are very useful when it comes down to internal transactions in a country that involves domestic payments and monetary policies.
Will CBDCs Take Over Physical Money?
BOA financial analyst stated that CBDC is not here to obliterate the idea of physical money but is here to work on flaws in the monetary system, and also create a better monetary system 15 years from now.
However, BOA also notes that there are still some challenges that need to be addressed for stablecoins and CBDCs to reach their full potential.
There are still concerns about the regulatory precedence on this stablecoin and cryptocurrency space, and the potential risk it might pose when the country launches a CBDC.
While there are still some challenges to be addressed and fixed, the fringe benefits these digital forms bring to the table are too promising to be ignored.
It is now up to the government to work to enhance the development and adoption of digital currencies in the country to harness their full potential and access their benefits.
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