Central bank digital currencies could be the next step in the evolution of money, says BIS report

According to BlockBeats, the Bank for International Settlements (BIS) stated that central bank digital currency (CBDC) is the future of currency, which is a new type of digital legal currency guaranteed by the government.

Central banks are well-positioned to trigger innovative changes to the current payments infrastructure, the Bank for International Settlements revealed in a new annual economic report.

Technology in the digital currency space offers opportunities for payment systems. The Central Bank Development Center combines this innovative technology with the tried and tested foundations of central banks. Central banks choose to use these forces for the common good. They can use it as a catalyst between supervisors and operators to develop a completely new payment system that runs on digital currencies.

The report also describes the pros and cons of CBDC, such as the need to carefully weigh the benefits of CBDC against the impact on the functioning of the financial system, such as disintermediation risks, including accelerated bank runs in times of stress, and the potential size of central banks in the financial system.

The BIS report said that to be successful, CBDCs must have certain features that make them more attractive than cash. They must also be user-friendly, resistant to cyberattacks and anti-counterfeiting.

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