The Bank of America, the second-largest U. S bank in its research said that the rising popularity of CBDCs makes them a better option than cash money. Bank of American said central bank’s digital currencies are overall a better option as compared to cash money. The Charlotte-based bank predicted the digital currency’s future and said that digital currency’s popularity is inevitable.
Bank of America is the second-largest U.S bank in terms of reserves. The report analyzes the rising interest of central banks toward digital currency. Digitization has become a global phenomenon, blockchain and crypto-oriented technologies have introduced digital trading and financing as the backup to real-world corporate finance. Amid these developments, there has been a massive paradigm shift and the popularity of digital currencies has crossed all the limits.
Digital trading and digital currencies don’t have any barriers to entry. People across the globe are connected via crypto exchanges, so, they can begin trading as per their desire. This unique aspect of the digital world makes it a potential candidate to replace paper money in the future.
However, a report published by the blockchain infrastructure platform Bison Trails, back in the month of May revealed that 80% of the world’s central banks are actively exploring options regarding digital coins (CBDC’s). Apart from that, 40% already started proof-of-concept programs. The report does not include third-world countries’ financial facts and figures.
The Bank’s officials also said that the rampant use of digital coins was “inevitable,” especially after the covid pandemic, where the role of paper currency significantly declined. The introduction of digital banking was the first nail in the coffin for the paper currency Bank also added in its report. Apart from that, the private sector is now more inclined towards blockchain and crypto technologies, and loss of control over real-world paper money are some of the major factors, which have pushed digital currency into the mainstream.
Central Bank’s Digital Coins really holds the potential to boost the economy by generating the economic activities of billions of dollars. Corporate organizations like Tesla, Microsoft, Visa, and Master cards are working with major central banks to launch their own digital currencies. However, in recent development e-commerce giant Amazon also decided to add a digital payment method to its store. Amazon also hinted to launch its own digital currency as well which will be backed by USD.
Bank of America addressed the concerns and further added that CBDCs can keep up the pace with bank deposits. In addition to that report also stretched the argument and labeled digital coins as currency as digital assets as they “allow to store money and offers to mean of exchange.”