Central Banks Explore Blockchain-Based Digital Currencies, Balancing Innovation With Control
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CBDCs (Central Bank Digital Currencies) are emerging as digital alternatives to fiat currencies, issued by central banks and built on blockchain technology.
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CBDCs aim to facilitate more efficient financial transactions, modernization, and digital adaptation, but raise privacy concerns and could enable government overreach.
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Blockchain provides the decentralized, transparent, secure platform for recording and verifying CBDCs transactions, but faces scalability challenges compared to traditional payments systems.
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Effective CBDCs require balancing financial stability and privacy along with overcoming technical hurdles around throughput and transaction speeds.
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Central banks are moving slowly on CBDCs to find the right balance between control and freedom and address the technological limitations.