● World Economic Forum (WEF) is encouraging CBDC adoption by central banks.
● WEF informed this in a blogpost after the Reserve Bank of Australia announced plans to launch a CBDC project.
● WEF stresses how CBDC will help reduce poverty and make money easier to access.
World Economic Forum (WEF) published a blog post on August 31, titled “what are central bank digital currencies?” after The Reserve Bank of Australia revealed plans to launch a CBDC project.
The project will be year-long research in collaboration with the Digital Finance Cooperative Research Centre in an attempt to explore the “innovative use cases and business models” before introducing CBDC in Australia.
The blog post described CBDC as a risk-free form of currency ensured by the state, as stated by the European Central Bank (ECB). They further added that all European states will launch their own digital euro by mid-20s.
Emphasizing the safety CBDC assets deliver while eliminating the risks and volatility of cryptocurrencies, the blog post continues talking about the benefits the asset offers in terms of increasing financial inclusion.
WEF believes CBDC will help depreciate poverty and make money secure and easier to access by everyone. Since individuals and businesses can store CBDCs in both the central banks, as well as, in their devices, prepaid cards, and digital wallets in the form of electronic tokens, CBDCs can double up as a domestic currency backup, helping financial institutions during events of low supply of cash.
In addition, the post also highlights the significance of utilizing Distributed Ledger Technology (DLT) to handle financial crimes as CBDC enhances KYC functionality and transparent financial channels.
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