The COVID-19 pandemic has accelerated the „digital money revolution“, the long-term consequence of which will be the replacement of cash by national digital currencies (CBDCs). This is the view expressed by Deutsche Bank analysts in a report on current challenges.
Deutsche Bank urged European authorities to accelerate the development of the CBDC. They believe that this step will strengthen the euro in the current geopolitical situation.
„Quarantines and social distancing measures introduced everywhere have led to an increase in the use of payment cards instead of cash. In response, companies and politicians should develop an alternative to cashless payment methods and eliminate mediation fees. Regional digital payment systems should be given priority,“ think analysts.
According to Deutsche Bank, the lag in the digital currency race against the backdrop of the progress of Bitcoin Era China and Sweden in this area is fraught with CBDC’s acceptance as a pioneer.
„If other countries do not catch up with the leaders, they may find that national companies will have to accept the CBDC and standards of other countries as means of payment,“ experts explain.
At the beginning of November, European Central Bank Governor Christine Lagarde announced a survey on the digital euro for EU residents.
The central banks of the Bahamas and Cambodia have already issued national digital currencies.
The Head of the Bank of Sweden called on the Parliament to give the digital krone the status of a means of payment being developed.
The USA has taken a cautious approach to the issue of the CBDC. The Head of the Federal Reserve Jerome Powell stressed that it is important for the US not to be ahead of the others with the digital currency issue, but to do so correctly. A similar position has been taken in Russia. Regulators from the UK, Japan, Korea, Canada, Australia and New Zealand are also not ready to take the lead.
In October, the Bank for International Settlements and seven central banks defined the fundamental principles and key characteristics of digital currencies for central banks.
China, which is in the group of leaders, intends to take an active position in developing international regulation of the CBDC.