Despite the US House of Representatives passing a law prohibiting the Federal Reserve from issuing central bank digital currencies (CBDCs), global interest in these currencies continues to grow.
The latest research from the Bank for International Settlements (BIS) covering 86 central banks globally has identified wholesale as a better platform for the future than retail.
A recent survey conducted by BMR to test the reliability of the technology behind these new digital contracts showed that 94% of central banks are currently involved in CBDC research.
Let’s explain in a similar way; wholesale CBDCs are used for transactions between banks and financial institutions like Visa and MasterCard, while retail CBDCs are primarily used for consumer transactions, such as buying a cup of tea at a coffee shop.
They also noted:
“As for retail CBDCs, over half of central banks are considering features such as fund blocking, operational integration, and zero fees.”
Read more:
BRICS: Bitcoin could fundamentally change the world financial system – International Monetary Fund
It is worth noting that the financial industry remains skeptical of CBDCs. Opponents argue that this would lead to increased regulation and control by the public sector, thereby limiting “innovative growth” in the sector.
Globally, interest in digital currencies has been steadily growing over the past few years. The People’s Republic of China was the first participant, while Nigeria and the Bahamas have also introduced their own digital currencies – the e-naira and sand Dollar, respectively.
On the other hand, former US President Donald Trump strongly opposed the idea of digital currencies. During a pre-election campaign event in New Hampshire, he mentioned his commitment to voters that if re-elected, he would eliminate CBDCs, stating that this should be seen as a “serious threat to individual freedom of will.” He implied:
“As your president, I will never approve the creation of nationally issued digital currency. Such coins would give our government absolute control over your funds.”
The former president also shared that recently he found Bitcoin on Twitter, which he sees as the final opportunity to counter CBDCs.