Crypto Countries

Central bank digital currencies (CBDCs) are digital versions of a country’s fiat currency, issued and backed by the country’s central bank. These digital currencies can be used in the same way as physical cash, but they also have the potential to offer additional features, such as increased security and faster transaction processing times.

The main advantage of CBDCs is that they can make the financial system more efficient and inclusive. For example, they can help to reduce the cost of financial transactions, making it easier for people to access financial services, and they can also provide a more secure and stable form of money, particularly in times of economic crisis.

However, there are also some potential drawbacks to the use of CBDCs. One concern is that they could potentially displace physical cash, which could be problematic for people who are unable to access digital financial services, such as the elderly or those living in remote areas. Another concern is that the use of CBDCs could give the central bank too much control over the money supply, which could lead to inflation or other economic problems. Additionally, there are also concerns about the security and privacy of CBDCs, as they could be vulnerable to cyberattacks or other forms of digital fraud.

Digital currencies may prove disruptive to a global monetary system long based on country-backed fiat currency. Countries around the world are researching how to develop and utilize their own central bank digital currencies, and the issue took center stage at the 2020 annual World Economic Forum (WEF) in Davos, Switzerland.

According to the WEF, centralized digital currencies could improve monetary policy efficiency, enhance monetary data transmission and reporting, enhance financial inclusions, and help improve the safety and resilience of payment systems.

Examples to examine:

Estonia

Ethopia: IOHK (the founders of Cardano is working with the Ethiopian government to create a national database of student and teacher ID’s using Atala Prism