According to a PWC report, Central Bank Digital Currencies (CBDCs) and cryptocurrencies in the private sector will have the biggest devastation in the next 20 years.
The digital tokens or electronic records of CBDCs representing the virtual form of a country’s currency, along with private sector cryptocurrencies, are predicted to have the greatest devastation in the next 20 years.
With just a few years left for the Federal Reserve to develop on its own, Wall Street is heating up with the idea that the next big destructive force on the horizon is the central bank’s digital currencies.
Under the leadership of countries larger than China and smaller than the Bahamas, digital money is attracting as much interest as the future of a growing cashless society.
According to the PWC survey, financial services organizations in Europe, the Middle East, and Africa are valued at more than $ 5 billion, with market uncertainty and barriers such as the introduction of CBDCs being among their first three concerns. For example, the report cites Dime, a cryptocurrency suggested by Facebook. With the support of a set of sovereign currencies, such cryptocurrencies can provide token sovereign payment systems instead of account-based payments.
The PWC report also predicts that the central bank’s skepticism about the potential of private cryptocurrencies to weaken monetary policy behavior will change.
According to a recent BIS survey, 60 percent of central banks consider CBDCs, and 14 percent are actively conducting pilot inspections. With the launch of a digital yuan last year, some fear that China’s sharpening as the world’s reserve currency will weaken the dollar. While China has said it is not targeting it, the Bank of America report says that giving the digital dollar will allow the US currency to remain more competitive compared to other currencies.
The COVID-19 pandemic accelerated financial services industry is undergoing significant transformation, the report said. Electronic payments are at the center of this transformation as digitization plays an important role in the economic lives of more and more people in the world population.
Global cashless payments are projected to increase by more than 80 percent from 2020 to 2025, from about 1 trillion transactions to about 1.9 trillion and triple by 2030.