There’s no denying that the world is moving towards a cashless society, and it will likely become more prevalent soon. But while this is all well and good for those who want to pay their bills with a swipe of their card, some people aren’t so keen on embracing an entirely digital economy.
For example, criminals will always look for ways to make money without using currency. And if you think about it, cryptocurrencies like Bitcoin are vulnerable when it comes to being used as a means of payment. They are not regulated, which makes them highly susceptible to fraud and theft. Many people call it the “Wild West” because there are no crypto police, and no one will help you. Just ask Mt Gox…
Now imagine if there was another way of making transactions that didn’t rely on blockchain technology or cryptocurrency. Well, now you have something very similar! This new type of digital currency has already been created by researchers from MIT Media Lab in collaboration with IBM Research – and they’ve dubbed it “cryptocurrency 2.0”. The team says this new form of money will be completely anonymous to the public except to the entity in control. It would also provide more security. (unlike traditional currencies). It’ll even operate outside existing financial systems thanks to its ability for immediate payments across borders (just like Ripple).
So, what exactly does CBDC stand for? Well, here’s how the researchers describe it: “Central Bank Digital Currencies.” Sounds cool, right? But before we get ahead of ourselves, let’s take a closer look at how these things work.
What are CBDCs?
CBDC stands for “Central Bank Digital Currencies .”A CBDC is issued and regulated by a nation’s monetary authority or central bank. CBDCs promote financial inclusion and simplify the implementation of monetary and fiscal policy. They may not anonymize transactions as a centralized currency as some cryptocurrencies do.
The idea of a digital currency not controlled by any central bank could be the key to mainstream crypto. So, pushing for CBDCs is not ideal for Crypto’s Vision. It’s the opposite. Blockchain Technology and its community are going for a decentralized financial system to eliminate Banks and Finacial institutions. These Institutions and Banks do not like that. That’s why they are pushing for CBDCs. CBCDs are centralized and bring so much more benefits to governments and banks.
“If we can get rid of the need for a central authority, then you don’t have to trust them,” said Brad Garlinghouse, CEO of Ripple and former CEO at Yahoo. “You don’t have to trust them with your money.”
The Vision people like Brad Garlinghouse have for crypto is a Decentralized Financial system where greed and corruption can be removed and a financial system that brings power back to the people. CBDCs are centralized and will only get more room for greed and corruption from governments and banks. They are essentially making CBDCs crypto’s evil twin.