Bank Of America Research Shows Digital Currencies Are Inevitable• January 23, 2023 11:22 am • Comments
The global research team of Bank of America just published a report that shows that digital currencies are inevitable and are considered the next step of evolution for modern monetary systems.
This is quite the confidence boost for investors to see a large traditional financial institution admit that the crypto industry will disrupt the existing financial system with certainty.
Specifically, the major bank mentioned the use of central bank digital currencies (CBDCs) which is what many expect the central banks to use in order to take advantage of the new technology that comes from crypto while also being able to retain a degree of control over the currency.
Bank of America then shared in the report that this could potentially revolutionize how money is used and it could be considered the biggest improvement in all of history.
Such statements in the report were extremely bold and indicates that change is already on the way.
Digital #Currencies, such as central bank digital currencies (CBDCs) and #Stablecoins, are the natural evolution of money and payments, Bank of America said in a research report on Tuesday. #blockchain #altcoin #BTC https://t.co/wxPwl0cPe3
— Welthee (@Welthee) January 18, 2023
The report explains that there are currently 114 central banks exploring CBDCs, representing 58% of countries globally and over 95% of global GDP.
It also notes that central bank digital currencies “do not change the definition of money, but will likely change how and when value is transferred over the next 15 years.”
According to Bank of America, “CBDC issuances by central banks appear inevitable for three reasons.” Firstly, they “may increase efficiencies for cross-border and domestic payments and transfers.”
In addition, they “may decrease central banks’ risk of losing monetary control” and “increase financial inclusion.”
It is clear that multiple countries and central banks of said countries are already experimenting with CBDCs and it is unknown which will have the first successful mass adoption.
Governments and central banks are expected to leverage the knowledge and technology from crypto & blockchain companies in order to pursue this initative.
Therefore, companies like Ripple may stand to benefit as such firms already have tools, platforms, and knowledge in place to successfully implement a CBDC.
If one central bank decides to consult a company like Ripple and the pilot turns out to be a success, it is only a matter of time before other central banks decide to jump on the trend as well.
As a result, it is expected that a majority of central banks will explore digital currencies in the next decade in an effort to not miss out on the benefits.
Bank of America says "#digitalcurrencies appear inevitable," calling #CBDCs "a natural evolution of today's monetary and payment systems." https://t.co/9EKvwXo4ij
— Bitcoin News (@BTCTN) January 22, 2023
The report does entertain a future in which both stablecoins and CBDCs can coexist. According to the analysts, stablecoins will likely continue to excel in certain use cases, especially when smart contracts are involved. However, just a few lines later, the researchers suggest that stablecoins are not long for this world.
“CBDCs’ design and programmability will likely determine the level of future stablecoin adoption and usage,” the report states.
“We also note that the potential for CBDCs to displace stablecoins largely depends on the former being interoperable with blockchains and blockchain-based applications.”
Look out, Tether, here they come.
Digital currencies, like CBDCs and stablecoins, are the natural evolution of money and payments, @BankofAmerica says.https://t.co/gPkNdAx7HS pic.twitter.com/ZPYE3lspEz
— CoinDesk (@CoinDesk) January 17, 2023
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