The issuance of CBDCs by countries could break the monopoly of the US currency in the financial market.
Central bank digital currencies (CBDCs) will change the way people live. Potential users of the new instrument and financial institutions must prepare for the change. This is the conclusion made by Deutsche Bank specialists as part of their next study.
America should beware
According to analysts, American specialists should pay special attention to the possibilities of CBDC. The Deutsche Bank team explained their point of view as follows:
The dollar is one of the leading currencies in the global financial market.
If countries issue CBDCs, the new instrument could undermine America’s national currency.
The researchers paid special attention to the possibility of changing the structure of financial relations between countries – issuers of cryptocurrencies. In particular, the parties will be able to abandon the US dollar, which will negatively affect the position of the American national fiat. Remarkably, the process has already started. Recently, information appeared on the network, according to which China’s partners began to abandon the US dollar in favor of the crypto-yuan.
Against the backdrop of a potential threat, America initiated the development of a national cryptocurrency. Recently, information appeared on the network about the beginning of testing the digital version of the dollar.
According to the Bank for International Settlements, the American national currency is involved in almost 90% of world transactions. The specialists of the financial institution recognized the dollar as the main reserve currency of the world. Rejection of it, against the background of the release of CBDC, according to Deutsche Bank, will undermine the position of the United States in the global financial market.
Statistics of exchange transactions with currencies in the foreign market. Data: Deutsche Bank research
Attitude towards CBDC in the world
The specialists noted that as of September 2020, 80% of central banks around the world are exploring the possibilities of creating a national cryptocurrency. As a reminder, Venezuela became one of the first countries to issue CBDCs. The authorities have tied the rate of the national cryptocurrency to oil reserves.
Even though the digital asset was released in 2018, as of September 2020, it is still unpopular with the local population. According to an investigation by Reuters, the country’s authorities were unable to prove the presence of oil reserves that could provide cryptocurrency.
Reuters investigation footage. This is how the journalists saw an oil field allegedly being developed by the Venezuelan authorities, the reserves of which provide the national cryptocurrencyю
Due to the fact that many countries and members of the crypto community did not take Venezuela’s crypto initiative seriously, the place of the leader in the issue of CBDC was again vacant. The closest to him came the Bahamas. It is known that local authorities want to release a national cryptocurrency in October 2020. China remains another contender for the championship.
We will remind, recently it became known that the Central Bank of Europe will decide the fate of the digital euro within a few weeks.