Bank of America claims that CBDC could revolutionize the global financial system.

A recent study by analysts at Bank of America (BoA) highlighted the receptiveness of 114 central banks to central bank digital currencies.CBDCs) and desire to join the United States train. He described digital currencies and distributed ledgers as an inevitable step in the evolution of money.

CBDC for non-banks

According to a report published by the BoA, a fully digital economy in which citizens have no banks would simply remove all intermediaries, eliminate redundant settlement systems, be cost-effective, and inefficient. Will ensure transparency to resolve capital allocation issues.

Research revealed that a CBDC would, for once, capture more than 1.4 billion unbanked people globally, including 6.5 percent of the unbanked in the United States. If they become part of the banked population, they will no longer be. separated from their possessions. They can find credit services like payday loans and many others.

Using a CBDC without a bank will provide them with seamless cross-border transactions, establish credit histories, provide credit scores, and eliminate all other disparities.

CBDCs and stablecoins

BoA said delay in launching CBDC and Check meeting Using stablecoins for cross-border payments could lead to a loss of monetary policy control for central banks. Later, it can lead to negative inflation.

According to research, the transaction volume of stablecoins was $7.9 trillion in 2022 and could be slightly higher in 2023 if unchecked.

The report, however, entertains the possibility of a future where stablecoins and CBDC can live together, and stablecoin will be used mostly because of its smart contract use cases. At the same time, CBDC will be more accepted due to its interoperability.

BoA also expressed the possibility. Liquidity risk (Financial Instability) If people are allowed to exit banks and switch to CBDCs.

CBDC and other countries

At the start of 2023, more than 114 countries were exploring CBDCs. The digital yuan, dollar and euro are among the most notable projects.

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