Part I of my exploration of cryptocurrency’s potential impact on debit and other forms of payments ended with a discussion of stablecoins, a cryptocurrency tied to a stable asset. In part II, we’ll look at a special category of stablecoin, one that is issued and controlled by the central bank of a country. This is referred to as a Central Bank Digital Currency (CBDC), which is intended to replace paper currency with digital, increasing security and monitoring. This is the type of cryptocurrency that may have the most impact on payments.
In fact, Visa’s head of crypto, Cuy Sheffield, states that CBDC will be the most important payment trend of the next decade:
I’d argue that Central Bank Digital Currency (CBDC) is one of the most important trends for the future of money and payments over the next decade. Regardless of anyone’s personal views of whether it’s good or bad, the reality is that global interest in it is not going away. The impact may not be felt for several years, but can only hasten the movement away from paper money and checks to a more fully digital payments ecosystem.
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