Deutsche Bank: Digital currencies of central banks will change the financial model of the world

CONTENT

  • German financial conglomerate sees global impact from CBDC

  • So far, there are three types of potential central bank digital currency

  • Russia does not see the difference between electronic payments and CBDC

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Large German bank believes the emergence of digital currencies from central banks will significantly affect financial relationships around the world

Germany’s largest financial conglomerate, Deutsche Bank, believes that central bank digital currencies (CBDC) Bills and coins may be a thing of the past due to a new financial instrument, central bank digital currencies (CBDC). As … More) will forever change the world’s financial model … This was stated by the specialists of the private wealth management department in a report entitled “Digital currencies of central banks. Reinventing money “.

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The document describes the main advantages and disadvantages of a CBDC, and also examines the interaction between such an asset and the government..

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The potential benefits, according to the bank, relate to the speed and ease of cash transactions (between individuals, as well as between the state and individuals), as well as opportunities for improving and improving policy – whether it is the ability to reduce interest rates or the identification and suppression of illegal cash translations.

Huge consequences for society

At the same time, the problems posed by CBDC are numerous, and the consequences for the financial system and society as a whole are enormous, according to Deutsche Bank..

“It is necessary to study the topics related to confidentiality, scaling and regulation,” the bank said.

The emergence of CBDC may lead to the disappearance of commercial banks, which will also have implications for the entire global economy.

Source: db.com

So far, Deutsche Bank sees three models of potential CBDCs:

    Deutsche Bank: Digital currencies of central banks will change the financial model of the world
  • Shared CBDC (account-based): Individual accounts are opened with the central bank and transfers are made directly through the central bank;
  • Shared CBDC (token / based): The central bank issues a digital token As the use of cryptocurrencies increases, new types of tokens are emerging. They can represent value or something intangible like voices. Two … More for the market. The transfer of the token will allow you to perform the same operations as in the case of cash. This CBDC option will provide immediate and anonymous settlement;
  • Wholesale CBDC (token-based): limited access to banks and other financial institutions; CBDC is for bulk settlements such as interbank payments and securities settlement.

Wait-and-see tactics

The fever around CBDC is gaining momentum more and more every month of 2020. It is noteworthy that it is the Asian market that is most actively in favor of the issue..

Following the leading China, Japan and South Korea entered the race to create the CBDC. In Europe, they also do not want to lag behind digitalization, but so far they are only studying the potential impact of such currencies on financial markets..

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The Central Bank of the Czech Republic, for example, saw a similarity between “helicopter money” and CBDC, and also noted the difficulties at the legislative level for the implementation of the idea.

In the domestic market, the situation around CBDC is even more vague. Despite the fact that Russia ranks first in Eastern Europe in terms of the popularity of contactless payments, the development of a national CBDC remains in question.

In April, the First Deputy Governor of the Bank of Russia Olga Skorobogatova said that in Russia there is no convincing answer to the question of what exactly such an asset can give and “even explain the difference between electronic payments and CBDC”.

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Deutsche Bank: Digital currencies of central banks will change the financial model of the world
Deutsche Bank: Digital currencies of central banks will change the financial model of the world
Deutsche Bank: Digital currencies of central banks will change the financial model of the world
Deutsche Bank: Digital currencies of central banks will change the financial model of the world

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