Ethereum founder Vitalik Buterin: Digitalization is inevitable, blockchain or not

Central governments around the world are currently considering the need to establish a central bank digital currency (CBDC), AMBcrypto reported on March 6. All this is thanks to China, as China is the first country to study and accelerate the realization of central bank digital currency.

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Japanese lawmakers have also begun discussing the possibility of issuing a central bank digital currency due to concerns about the progress of China’s digital currency. China has been exploring the benefits of a central bank digital currency since 2014, while the Bank of Japan (BOJ) also began actively exploring a central bank digital currency in November 2018.

In fact, other countries such as Canada, Switzerland and Sweden have also joined the competition to develop central bank digital currencies. Central bank members of the above three countries also plan to hold a meeting in April 2020 to discuss the possibility of establishing their own central bank digital currencies.

Sweden began testing its digital currency project, e-krona, on February 20, 2020. Similarly, Federal Reserve (FED) Chairman Jerome Powell also confirmed that the Fed is exploring the benefits of central bank digital currencies. In addition, European Central Bank (ECB) President Christine Lagarde also recently talked about central bank digital currencies and said that the ECB is eager to see the use of central bank digital currencies.

However, it is not only government agencies around the world that are conducting research on central bank digital currencies. Many cryptocurrency experts are also paying close attention to central bank digital currencies. Vitalik Buterin, the founder of Ethereum, expressed his latest views on it.

In a recent Block TV podcast, Vitalik talked about his views on the direction of digital currencies on a global scale and claimed that digitization is inevitable.

He added:

Digitalization is inevitable, with or without blockchain. The main challenge with currencies issued by central banks and companies is the centralization of power, the centralization of data collection, and your reliance on a potentially centralized intermediary to control these systems, and they have the power to decide over the users who participate.

Vitalik predicts that the more attractive currency in the future will be decentralized and private, as it will be more able to avoid the "bottleneck of centralization." He added:

We've seen a lot of situations like this where even completely legal things end up being restricted because whoever is operating the centralized nodes (checkpoints) just wants to exclude certain categories of users, and I think that's why people will continue to be interested in fully decentralized digital currencies.

On the other hand, a recent report on central bank digital currencies released by the Bank for International Settlements (BIS) shows that the digital currency projects currently underway in countries around the world do not have a clear focus on cross-border payments.

The report also states:

In terms of cross-border connectivity, no central bank digital currency project explicitly focuses on payments outside the central bank’s jurisdiction. It is worth noting that several central banks are currently conducting cross-border payment pilot projects, which focus on consumer experience while developing central bank digital currencies.

As early as January 2019, the Bank for International Settlements released a report stating that 70% of central banks are exploring how to build mutual trust measures. Although countries have long been eager to use central bank digital currencies, no central bank has actually selected a specific release date. With the acceleration of digitalization in the past few months, the question of central bank digital currencies is no longer "will it be issued?", but "when will it be issued."