Central Bank Digital Currencies (CBDC) are here to stay and may set the stage for a paradigm shift to a digital economy, according to Visa's Head of Crypto, Cuy Sheffield.
In a recent series of tweets, the Visa crypto chief highlighted that the growing interest in CBDC's is not fading away; hence stakeholders ought to be more involved in these developments.
2/ As governments evaluate CBDC, the path that they decide to take will have major implications for privacy, monetary sovereignty, geopolitics, and financial inclusion, as well as global adoption of crypto dollars and Bitcoin
— Cuy Sheffield (@cuysheffield) July 3, 2020
Sheffield went on to note that governments will play an essential role in the adoption of Bitcoin and other crypto-assets given policy implications in issues like privacy:
“As governments evaluate CBDC, the path that they decide to take will have major implications for privacy, monetary sovereignty, geopolitics, and financial inclusion, as well as the global adoption of crypto dollars and Bitcoin.”
Today, developments within the CBDC space are more advanced, compared to research papers that previously defined the industry. Sheffield emphasized that this move from occasional papers to more solid content is triggered by the growing contribution from experts, organizations, and academics.
It is unsurprising that these sentiments coincide with Visa's growing interest in digital currencies. The payments and card service provider filed for a digital dollar patent earlier in the year. It was also initially in the Libra association before leaving alongside the likes of Mastercard and eBay.
Global CBDC Trends
The latest annual Bank of International Settlements (BIS) report also indicates a spike in CBDC interest. However, the BIS also noted that stakeholders should be more focused on policy effectiveness as opposed to trying to outdo private projects.
That said, China seems to have taken an early lead, having piloted the digital yuan back in May as it prepares to ‘wipe out' fiat renminbi (RMB) in circulation over time.
Europe has also taken an interest in digital currency for its member states. Though it might take much longer to get a consensus, France and Italy have already signaled the willingness to participated in a digital Euro pilot. While these tech advancements are promising, scaling to more significant masses might be the challenge as per a recent insightful report by the Bank of Canada.