The concept of Central Bank Digital Currency (CBDC) in today’s era is majorly inspired by the ongoing modernization of currencies and cryptocurrencies. Ashok Venkateswaran of Mastercard stated his thoughts on CBDCs while talking to CNBC.
“The tough part is the adoption. So if you have CBDCs in your wallet, you should have the ability for you to spend it anywhere you want- very similar to cash today,” said Venkateswaran.
At the beginning of this week, the Singapore Fintech Festival was organized and dozens of financial experts stated their beliefs over evolution and adoption of central bank digital currency.
Earlier this week, Mastercard concluded the testing of its solution in the Hong Kong Monetary Authority HKD pilot program to simulate the use of retail CBDC similar to electronic Hong Kong dollars.
Mastercard entered the race to dominate the CBDCs market in the mid of 2021 and since then, the company has partnered with dozens of banking giants and regulators all across the globe to modernize the concept of CBDC.
Data shows that Sandbox Hong Kong’s CBDC is offering the ecosystem for the trail of minting, distribution and spending of electronic Hong Kong dollars.
Ashok exemplified Singapore where the case of retail CBDC is not compelling enough as the region has an efficient payment system. He believes that “No reason for retail CBDC is there in Singapore but there is a case for a wholesale CBDC for interbank settlement.”
How Big is the CBDC Category?
According to a X (formerly Twitter) post of Ripple dated September 19, 2023, global usage of CBDCs is increasing. Per the tweet, most central banks are actively exploring their options with CBDCs. According to Juniper Research, a research and consulting firm, “CBDC payments could reach $213 Billion by 2023.”
According to Ripple, “this boom is echoed in sentiments shared by global financial leaders as part of its latest New Value Report.”
Over 90% of those who polled for the analysis predicted that digital assets such as CBDCs will have a substantial influence on business, finance, and society in “the next three years.” Furthermore, more than 80% of the financial leaders polled expect to start employing crypto, stablecoins, and/or CBDCs in their firms within the next 12 months.
The available data states that Bahamas,Brazil, China, Eastern Caribbean and dozens of other countries have already launched their CBDCs. Coinmarketcap data states that the overall market capitalization of the crypto market declined a few percent in the past 24 hours and was at $1.38 Trillion when writing.
The views and opinions stated by the author or any people named in this article are for informational ideas only and do not establish financial, investment, or other advice. Investing in or trading crypto or stock comes with a risk of financial loss.