Blockdata firm Releases Report Highlighting Opposition to CBDCs

It is no news that millions of nations around the world are exploring the creation of their own digital currency, mostly with the aim of innovating and easing the burden off their payment ecosystem. Most monetary authorities also intend to develop their Central Bank Digital Currencies (CBDCs) with the intention of making both fiat and digital money co-exist.

Despite the development thus far, a new report published by Blockdata firm revealed the reasons behind some private stakeholders kicking against the insights of a CBDC.

The report dubbed “The State of CBDCs in 2022” threw more light on the developments in digital currency throughout the year as well as important points from investments against CBDCs.

The report spotted two different types of CBDCs which are wholesale and retail. According to the report, Wholesale CBDCs are designed specifically for financial intermediaries that hold reserves at central banks and are used for payments, and settlement of securities, amongst other benefits. Likewise, retail CBDCs allow digital money to be readily available to the public. 

Notably, several countries and technologies have had sponsorship from central banks to launch a project on CBDC, ranging from India, and Australia, amongst several others.

The report also highlighted concerns raised by private stakeholders against CBDC. Generally these concerns center on anonymity, interoperability, scalability, technological structure, and balance between the regulatory policies and the CBDC design.

Countries Double up on the Launch of CBDCs

As of May 2022, about 110 countries were considering launching their CBDC. While some countries have launched their own digital fiat many others are still researching the benefits to their economies. For instance, Nigeria with the launch of its e-Naira became one of the first countries to officially use its e-currency. The nation’s Apex bank recently added new features to attract new users.

However, earlier this month, the Central bank of Pakistan announced its plans to issue its digital currency in 2025 stating that it has signed new laws for Electronic Money Institutions (EMIs). Equally, the National Bank of Ukraine (NBU) published a concept note on the launch of a digital currency dubbed e-hryvnia to participants and representatives of financial institutions in the crypto economy.