In a report published on November 10 entitled “What we must do to rebuild,” Deutsche Bank is convinced that central bank-issued digital currencies (CBDC) will replace cash in the future. In any case, do you agree?
Specifically, the report deals with economic estimates. Also, proposals to help global economies affected by the Coronavirus.
“Extensive quarantine measures and social isolation have only increased the use of cards rather than cash. In response, businesses and legislators must develop alternatives to credit cards and eliminate middleman fees.”.
Furthermore, he added:
“For now, the priority should be on regional digital payment systems. In the long term, central bank digital currencies (CBDC) will replace cash. “
CBDCs will replace cash
In this regard, Deutsche Bank affirms that the pandemic has accelerated the digital cash revolution, which will allow the inclusion of CBDCs. According to the bank, CBDC like China’s digital yuan or Sweden’s e-krona will replace its cash in the long run.
Sure enough, Sweden and China have started testing CBDCs. Having three factors in common:
- Both have embraced digital technology, for many years.
- Cash payments were declining before the Coronavirus.
- They both support the infrastructure of digital payments.
It should be noted that, although both countries share these factors, each has a different motivation to develop its CBDC.
Deutsche Bank Warning
Returning to the topic, in the report, Deutsche Bank Research also warned European policy makers about the risks of not developing their own digital currency project. Basically in response to the active progress of China and Sweden in this field.
Precisely, the bank argued that lagging behind other jurisdictions could force the adoption of foreign policies and CBDCs:
“If other countries don’t catch up, they may find that their companies are forced to accept CBDCs and the policies of other countries as payment methods.”
In this way, the Deutsche Bank demanded that European leaders advance in the development of a European and independent digital currency solution. Mainly, to strengthen the euro.
As a fun fact, while Deutsche Bank is pushing for accelerated development of a global digital currency, several countries are in no rush to issue a CBDC.
Proof of this, Jerome Powell of the US Federal Reserve stated that: “The United States was not concerned about other countries getting the advantage of being the first to act when it comes to issuing a CBDC.”
Also, New Zealand and Russian officials say they would prefer to take a “watch and wait” approach.
Finally, the Deutsche Bank, confirmed: “With the world economy in its worst state since the war, there are many opportunities to rebuild a better system. As a consequence, CBDCs will replace cash in the future”.
I close with this phrase by Mary Pickford: “The past cannot be changed. The future is still in your power”.