According to Deutsche Bank, the pandemic has accelerated interest in digital currencies. The financial institution considers that adopting digital currencies is a natural step to follow.
Renowned financial institution Deutsche Bank (DB) considers that a future in which central bank digital currencies (CBDC) replace cash is increasingly closer. The German bank even referred to the move towards digital currencies as “the next era of money”.
The entity says that the context of the pandemic that the world is experiencing, along with the risks of virus transmission through cash, has accelerated “the digital money revolution” worldwide.
“After centuries of cash economics, we are finally ready to move into the next era of money,” says DB. In a recent study, they focus precisely on the steps to take after overcoming the pandemic.
However, the bank believes that the transition is taking a long time, particularly in the most advanced economies. In the opinion of the financial institution, one of the factors that delays the process is the concern about the privacy aspects that the move to centralized digital currencies entails.
Similarly, the institution considers that adapting monetary policies to the digital environment is another detail that lengthens the process to move to the implementation and widespread use of CBDC.
Data from DB indicate that there has been a major stumbling block to advance the widespread implementation of CBDC in certain countries. The study reflects that there is still some preference for cash in countries like the United States, the United Kingdom, and Germany. Meanwhile, China is moving faster in its digitization, with most of its citizens already using digital wallets for their everyday purchases.
Race for Digital Currencies and Privacy Concerns
According to DB, there is much less concern about privacy in China than in countries like the United States, Germany, and France. Of a group of respondents, only 10% showed interest in this aspect, thus reflecting the payment preferences mentioned above.
The German bank believes that this difference has allowed China to move faster in terms of implementing its digital yuan. China is the country that is the closest to launching its own CBDC. They have already conducted various tests on its use in shops with real users.
Users have raised concerns not only about privacy but also about the convenience of the digital yuan.
Despite what Deutsche Bank has said, the general position of governments regarding their potential central bank digital currencies is quite clear. With these, they do not seek to respect the privacy of their citizens.
CBDCs appear as the solution to various cash problems and even as the next step in the evolution of money. Some are those who are directly interested in their ability to control people.
That seems to be the case with the Bank for International Settlements (BIS). Agustín Carstens, general manager of the entity, believes that “a digital currency will allow central banks to have absolute control.”
By Alexander Salazar