Intense interest in cryptocurrencies and the Covid-19 pandemic have sparked debate among central banks over whether to issue their own digital currencies.
China has been a leader in developing its own digital currency. It has been working on the initiative since 2014. Chinese central bank officials have already conducted massive trials in major cities, including Shenzhen, Chengdu and Hangzhou.
“China’s experiment is very large,” said J. Christopher Giancarlo, former chairman of the US Commodity Futures Trading Commission. “When the world arrives in Beijing next winter for the Winter Olympics, they will use the new digital renminbi to shop and to stay in hotels and buy meals in restaurants. The world will see a functioning function [central bank digital currency] very soon within the coming year. “
The United States plays catch-up. In late February 2021
Lawyers argue that central bank digital currencies can facilitate cross-border transactions, promote financial integration and provide payment system stability. There are also privacy and surveillance risks with publicly issued digital currencies. And in times of economic uncertainty, people may be more likely to withdraw their funds from commercial banks and speed up a banking round.
Watch the video above to find out how the central bank’s digital currencies can become the future of global finance.