Central Bank Digital Currencies (CBDCs) have been a key topic for blockchain technology enthusiasts, futurists, governments, and policymakers recently. In today’s world, they are evolving from a topic of interest to a high-potential tool for economies around the world to better address the massive economic impact of the COVID-19 pandemic and beyond.
Policymakers, including central banks and governments, are uncertain where, how, and what tools to use to save their economies as they grapple with the crisis and prepare for the next. As a result, it has increased the interest in digital currency innovation for the decade to come.
To succeed as a significant component of central bank recovery toolkits, however, States must be serious about meeting the privacy, transparency, and trust expectations necessary for them to become a reliable means of exchanging value within the global economy.
Technologies that support and automate while mitigating risk at scale are a vital component to the functioning of CBDCs if they are to offer any help in addressing current economic factors, while maintaining privacy of users by design and not subject to trust.
In Japan, for example, Coinfirm successfully built an AML and analytics solution for a blockchain-based coin, pegged to one of the leading traditional currencies. Such solutions for blockchain assets dramatically increase efficiency and effectiveness in comparison to traditional assets, not to mention the potential for real-time policy-making and programmability.
Industry experts agree that these points are important. A new report written by University College London researchers and industry experts Dr. Geoffrey Goodell, Dr. Paolo Tasca, and Hazem Danny Al-Nakib seeks to equip governments and central banks with a mechanism to help ensure the continuity and sustainability of their economies, along with both speed and transparency of payments with their Nation...