Inside a new annual economic report printed through the Bank of Worldwide Settlements (BIS), the lending company says roughly 90% of central banks are investigating the practicality of adopting central bank digital currencies, or CBDCs.
The BIS report highlighted ale current sovereign fiat money to supply (relative) cost stability and public oversight while criticizing crypto’s lack of ability to do “fundamental fundamental functions of cash” as well as their opacity in relation to accountability to everyone.
However, the report did highlight crypto’s programmable nature along with the borderless aspects of decentralized finance (DeFi) as potential benefits that will create a situation for integration into CBDCs. You will find presently three live retail CBDCs with 28 pilots. Digital yuan from the People’s Bank of China presently supports the dominant position with 261 million users. Additionally, over 60 jurisdictions have fast retail payment systems.
For making a situation for using centralized digital assets, BIS reported recent adverse developments within the DeFi sector. One particular example within the report may be the implosion of Terra (LUNA) — now renamed Terra Classic (LUNC) — and Terra USD algorithmic stablecoin. Next, BIS continued to focus on the limited scalability of certain blockchains, for example Ethereum (ETH), causing network congestion and therefore sharp increases in transaction charges.
Additionally, it elevated the issue from the practicality of layer-1 solutions because of the significant fragmentation of these blockchains to deal with such drawbacks. Finally, the report pointed to some record quantity of cryptocurrency hacks previously year included in digital assets’ natural safety risks.
