Central Bank Digital Currency: The Future of Transactions

03/14/2023 14:35 • Tech Trends • 99 views

On March 14, according to Juniper Research, the total annual value of transactions using the Central Bank Digital Currency (CBDC) will increase from US $100 million to US $213 billion in 2030. In addition, with the development of cross-border CBDC payment system, the proportion of domestic CBDC payment in the total transaction volume will decrease from “nearly 100% in the current pilot stage” in 2023 to 92%.

The global CBDC transaction volume will reach US $213 billion by 2030

Analysis based on this information:

The Central Bank Digital Currency (CBDC) has become a buzzword in the financial industry, with many countries exploring the possibility of developing their own CBDC. According to a recent report by Juniper Research, the total annual value of transactions using CBDC will increase from US $100 million in 2021 to US $213 billion in 2030. This projected growth is due to the increasing adoption of CBDCs and the development of cross-border CBDC payment systems.

CBDCs are digital representations of a country’s fiat currency, issued and backed by the central bank. Unlike cryptocurrencies such as Bitcoin, CBDCs are legal tender and aim to provide a safe, secure, and efficient means of payment. With CBDCs, central banks can have greater control over the money supply and the flow of funds within the economy.

The Juniper Research report predicts that the proportion of domestic CBDC payments in the total transaction volume will decrease from “nearly 100% in the current pilot stage” in 2023 to 92% by 2030. This is due to the expected adoption of cross-border CBDC payment systems, which will enable transactions between different CBDCs without the need for intermediaries. This will reduce costs and increase the speed of cross-border payments.

However, the adoption of CBDCs also raises concerns about privacy and financial stability. CBDCs are centralized, meaning that central banks have full control over users’ transactions and can monitor them. This has raised concerns about the potential abuse of power and the violation of individuals’ privacy. Additionally, CBDCs could impact the banking system, as it could lead to a decrease in demand for traditional bank accounts.

In conclusion, the adoption of CBDCs is inevitable as countries strive to modernize their payment systems. The projected growth of CBDC transactions is proof of its potential to revolutionize the financial industry. However, policymakers must address concerns about privacy and the impact on the banking system. As CBDCs gain wider adoption, cross-border payments are likely to become faster, cheaper, and more secure.

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Central Bank Digital Currency: The Future of Transactions

The global CBDC transaction volume will reach US $213 billion by 2030

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