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05 March 2021

Banks will be required to work with crypto, e-money and CBDCs to survive

Banks will be required to work with crypto, e-money and CBDCs to survive


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But this is exactly what happens in finance: There is no way to send both digital fiat money and cryptocurrency from a bank account without extra steps.

It’s not affecting the masses just yet, but after the issuing of national digital currencies, or central bank digital currencies, in the next few years over the world, the situation is about to become complicated.

However, central bank digital currencies are going to become a part of our daily lives in three to five years.

So far, the Chinese digital yuan is the only example of digital money issued by central banks that is actually working.

In turn, international payments system Visa recently introduced a protocol for offline transactions with central bank digital currencies.

In this case, CBDCs essentially replace cash, leading to an increase in the number of transactions controlled by the issuer, bank or financial intermediary.

Banks will have to make sure that fiat, CBDC and crypto transactions can be made in one place: in a banking application.

That being said, fiat and digital money share common functions, and the method and quality of their implementation affect how the multi-format financial solution is going to be created.

If each service conducts Anti-Money Laundering checks for CBDC and cryptocurrency transactions following its own policy, the bank on the receiving end will not confirm them.

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cointelegraph.com
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