London Blockchain Conference 2023: Status and what’s coming with CBDCs
[gpt3]rewrite
Central Bank Digital Currencies (CBDCs) have been touched upon by various speakers throughout the London Blockchain Conference 2023 (LBC 2023), so a panel focusing on one of the hottest topics in blockchain and finance was a fitting way to help round out the conference.
Just before lunch on Day 3 of LBC, the hungry crowd at the business strategy stage were treated to some tasty nuggets of wisdom on the subject of CBDC from a panel of industry experts.
A show of hands prior to discussion showed that most of the audience had at least heard of CBDCs. However, there were conflicting views in the crowd about its benefits. But what exactly is this industry buzzword at the moment?
“It’s a new form of money that essentially has the responsibility of the central bank … it could be digital cash or tokenized cash,” explained Kumaraguru Ramanujam, founder and CEO of Intrasettle.
He explained that despite this universal definition, “each jurisdiction has a different need for CBDC.” An example Ramanujam gave was India, where the country is demonetizing cash because of fake currency coming in from Pakistan; a possible solution to this under discussion in the Indian central bank is a CBDC.
Regardless of the use case, there was broad agreement among the three-person panel that CBDCs would have some kind of role in the future of money.
“I think blockchain is a big part of the next generation of financial infrastructure,” said James Belding, CEO of Tokenized. “A core motivation for CBDC is sovereignty and the competitiveness of money. If central banks and economies are always competing with each other, this is another field they will think about.”
By 2023, over 114 countries, representing over 95% of global GDP, are exploring the establishment of a CBDC, with 11 countries having so far launched their own digital currencies.
Despite this seemingly high uptake, or at least consideration for the technology, there are many challenges to CBDCs being widely implemented by central banks.
“So many policy issues touch CBDC, such as cybersecurity, privacy … this inevitably makes it, at a policy level, a very slow process of change,” said Chris Ostrowski, founder and CEO of Soda Public Money. “You also want to design something that is non-disruptive in the transition from cash.”
These challenges are not insurmountable, and the benefits of CBDC may be worth the trouble.
“You can create more transparency and trust with a blockchain approach,” Belding suggested. This sentiment was echoed by Ostrowski, who said that “we don’t have as much privacy and control over our spending as we think we do today … I think CBDC is an opportunity for more democratic accountability.”
Trust and privacy were central themes of the discussion, and things Ramanujam suggested are necessary for a successful CBDC; he also threw the terms “accessibility and offline” into the hat of good CBDC policy – as a digital currency cannot be truly accessible if it cannot be used offline.
To round out the panel, the speakers offered one-sentence mantras for the audience and the industry to think about and perhaps act on when it comes to CBDC.
“We should concentrate on the before and after use cases,” Ostrowski said, as a way to improve the implementation and development of CBDCs going forward.
Belding took the optimistic route, saying, “despite all the political risks, I’m very excited.”
Ramanujam concluded that “we need to create more awareness about CBDCs.” At least in that respect, after the half-hour discussion ended and the packed room cleared out for lunch, LBC and the three speakers on the panel could claim to have contributed to the goal.
To learn more about the central bank’s digital currencies and some of the design decisions to consider when creating and launching it, read on nChain’s CBDC Playbook.
See: Blockchain provides perfect foundation for CBDC
width=”562″ height=”315″ frameborder=”0″ allowfullscreen=”allowfullscreen”>
New to Bitcoin? Check out CoinGeeks Bitcoin for beginners section, the ultimate resource guide for learning more about Bitcoin – originally envisioned by Satoshi Nakamoto – and blockchain.
[gpt3]
