Intense interest in cryptocurrencies and the Covid-19 pandemic have sparked debate among central banks on whether they should issue digital currencies of their own.
China has been in the lead in developing its own digital currency. It’s been working on the initiative since 2014. Chinese central bank officials have already conducted massive trials in major cities including Shenzhen, Chengdu and Hangzhou.
“China’s experiment is very large scale,” said J. Christopher Giancarlo, former chairman of the U.S. Commodity Futures Trading Commission. “When the world arrives in Beijing next winter for the Winter Olympics, they are going to be using the new digital renminbi to shop and to stay in hotels and to buy meals in restaurants. The world is going to see a functioning [central bank digital currency] very soon, within the coming year.”
The U.S. is playing catch-up. In late February 2021, Fed Chairman Jerome Powell said the U.S. will engage with the public on the digital dollar this year.
Advocates contend central bank digital currencies can make cross-border transactions easier, promote financial inclusion and provide payment system stability. There are also privacy and surveillance risks with government-issued digital currencies. And in times of economic uncertainty, people may be more likely to pull their funds from commercial banks, accelerating a bank run.
The source of that article can be found here:
https://www.cnbc.com/2021/03/06/why-central-banks-want-digital-currencies.htmlWith the development of the digital sphere, banks understand that money can pass by them and something needs to be done, but there is still no exact confirmation of what will happen and how. On the example of China, we can see that the testing process is underway, but they also do not force this direction, since in order for everything to work as needed, a guarantee of performance and agreement with other countries is needed. You don't need to think that if one bank decides to work with crypto, then everyone will do it right away or it will be accepted by other countries. I believe that all this is not yet accurate and probably a lot of work is underway to resolve the problem in the financial sector.