In current models, CBDC will not replace cash and will not be suitable for everyday transactions. This conclusion was reached by the head of the Copper research department, Fadi Abualfa, writes The Block.
The expert called the Central Bank, which issues national digital currencies, a “mammoth”.
According to Abualfa, the monetary regulator does not have the “talent” and tools to launch a fully automated decentralized equivalent of cash.
“Each central bank project is creating its own isolated approach, and there is no retail wallet infrastructure yet,” he explained.
In the model of issuing CBDC through intermediary banks, there may be a problem with consumer confidence.
“Institution-issued digital currencies could lead to chaos […]if there is scandalous news about one of them”he added.
The expert pointed out the difficulties in creating trading pairs and the difficulties in maintaining the linkage between CBDC brands. He cited the collapse of Silicon Valley Bank as an example.
According to the analyst, the decisive factor of interoperability is not properly considered. Current projects indicate the presence of multiple blockchains with intermediaries controlling the flow.
“In the misguided pursuit of common standards and blockchain usage, how is everyone supposed to simultaneously agree on the design and structure of CBDCs around the world? Models should provide integration, not vendor lock-in. Each Central Bank will have its own considerations and requirements”, the expert concluded.
Recall IMF will develop a platform for national digital currencies, according to the media.
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