• Bank of America says that digital currencies appear inevitable, citing central bank digital currencies (CBDCs) and stablecoins as a natural evolution of current monetary and payment systems.
• Bank of America believes that the private sector is critical for CBDC development, as CBDCs have the potential to revolutionize global financial systems.
• Bank of America believes that central bank digital currencies will increase efficiencies for cross-border and domestic payments and transfers, decrease central banks‘ risk of losing monetary control, and increase financial inclusion.
Bank of America recently released a report on the future of digital currencies, digital assets, and central bank digital currencies (CBDCs) that gave insight into the bank’s view on the inevitable future of digital currencies. The report notes that digital currencies appear to be inevitable, as they are a natural evolution of today’s monetary and payment systems. According to the report, there are currently 114 central banks exploring CBDCs, representing 58% of countries globally and over 95% of global GDP.
The report explains that CBDCs do not change the definition of money, but will likely change how and when value is transferred over the next 15 years. Bank of America believes that the private sector is critical for CBDC development and issuance, as CBDCs have the potential to revolutionize global financial systems. The bank believes that CBDCs will increase efficiencies for cross-border and domestic payments and transfers, decrease central banks’ risk of losing monetary control, and increase financial inclusion.
Bank of America’s report also explains that CBDCs are not a new idea, as they have been discussed and studied for many years. However, the technology and infrastructure needed to support these digital currencies has recently been developed, allowing for a more comprehensive exploration of the concept. The report notes that the development of CBDCs is a complex process that involves multiple stakeholders, and that there are still many unanswered questions about the implications of CBDCs.
As the report states, digital currencies appear to be inevitable, and the private sector must remain involved in the development process to ensure that CBDCs are implemented in a way that provides the most benefit to global financial systems. Bank of America’s report is a valuable insight into the future of digital currencies and their potential implications for the global economy.
