CBDCs: the next big thing or a costly distraction? One expert warns of the potential costs and risks.
However, Tony Yates, Financial Times writer and former senior advisor to the Bank of England, advises against CBDCs. According to Yates, “The huge undertaking of digital currencies is not worth the costs and risks.”
CBDCs are already in place in most countries as most countries already have digital versions of cash, coins and notes. Yates, therefore, questions the motivations behind global rollouts of CBDCs, calling them “suspect.” CBDCs could be a way of quashing crypto, including decentralized currencies such as Bitcoin . However, “Cryptocurrencies are such ban candidates for money,” he explains, adding:
“They don’t have money supplies managed by humans to generate steady paths for inflation and are hugely expensive and time consuming to use in transactions.”that most of Bitcoin’s use is “illicit” and “speculative.” I would guess that most of the use is 1) illicit, and not discouraged by central bank provision and 2) speculative; if CBDC were to cause a large price drop, this could wipe out and discourage a lot of users.
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