What is CBDC?
In 2023, the market is filled with various cryptocurrencies that have been created by companies, startups or individuals. However, with the growing popularity of the industry, large public institutions have also thought about launching their own digital currencies.
- WHAT IS CBDC?
CBDC (Central Bank Digital Currentsy) is a digital currency issued by the central bank of a particular country. What are the differences from hundreds of other cryptocurrencies on the market?
Cryptocurrency issued by the central bank is more strictly regulated and better protected from manipulation and attacks. Nevertheless, it is not fully controlled by the bank. As a result, large financial institutions will be much safer working with this currency than, for example, with bitcoin.
At the same time, the basic principles of the Central Bank's cryptocurrency are similar to those of most coins. The bank develops the blockchain, establishes consensus rules and lays down a certain development plan. However, such cryptocurrencies are built on a decentralized blockchain, which means that the fate of the coin depends more on users than on the issuer.
In 2023, a number of countries have been considering issuing CBDC for quite some time. Among them are England, Sweden, Switzerland, Ukraine and the Marshall Islands. However, so far no concrete action has been taken towards the issue of such a cryptocurrency, as far as we know.
CBDC draws both approval and criticism from influential experts. For example, Anthony Lewis, director of research at R3, said that 2018 could be the year of central bank cryptocurrencies.
"National banks' digital currency will begin to be used en masse as early as 2023. We've talked to many central banks, and almost everywhere we've been told that the only effective solution to the current payment system problems can only be blockchain."
Not everyone shares this opinion: a number of experts believe that issuing a national cryptocurrency, which will be used by millions and billions of people every day, could put the country's economy at serious risk.
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