IBM Blockchain Financial Services CTO Praises Central Bank Cryptocurrency Concept and CBDCs Benefits
During an interview with CNBC’s Squawk Box, which took place on Wednesday, November 14, 2018, CTO and Global Lead for IBM’s Central Bank Digital Currency (CBDC) solutions, Stanley Yong discussed the power CBDCs have in financial settlements, especially considering the possible risks tied to this respective field. He also considers CBDCs as being beneficial in ridding the current market’s existence of fragmentation.
As previously mentioned, Central Bank Digital Currencies (or CBDCs) are government-controlled virtual currencies. In particular, they work the same way as fiat currencies would, i.e. centralized, but online. Yong is a clear supporter of CBDCs, as he mentions the following during the interview:
“[CBDCs] are the only way you can have the certainty of settlement that is required for financial services, especially when you think about the kinds of risks that came about during the Lehman crisis of 2018.”
In particular, he argues that CBDCs combined with “delivery mechanisms” such as stocks, or commodities, would have surely prevented the risks tied to the long-lasting impact of the 2008 financial crisis.
Another interesting point that the CTO made during CNBC’s interview is the main con of e-wallets, which he deems to be the presence of “fragmentation” and that “closed loop-systems” need to become one that is “open-loop”.
An example, which news outlet, CoinTelegraph reported is that of prepaid travel cards, which are very limited, compared to “Visa and Mastercard prepaid debit cards,” which are more open. However, Yong still considers the latter as a poor system because of the ridiculous fees tied to them.
When asked whether a CBDC would be a better fit in place of the U.S Dollar, Yong argued that given that “correct business and legal overlays” exist along with the use of blockchain technology, then such a replacement is definitely possible.
To watch the CNBC interview: