In its latest edition of the “Konzept” periodical, published Tuesday, the Deutsche Bank said the coronavirus pandemic has accelerated the use of digital payments over cash, and the trend will eventually lead to CBDCs taking over cash. According to Marion Laboure, a macro strategist at Deutsche Bank, many countries are behind in their progress for digital currencies. Laboure said countries such as China and Sweden are leading the digital currency development.
“USA and Europe need to catch up.”
Laboure said that if other countries do not catch up, “they may find that their companies are forced to adopt the digital currencies and policies of other countries as payment mediums.” The U.S. and Europe, in particular, need to catch up, according to the macro strategist. She said central banks’ development in the area is “too slow.” Both the countries have been studying CBDCs, but do not appear to be in a rush to issue one. She said developed nations need to overcome two key challenges for insurance and adoption of CBDCs, which are low-interest rates and cultural/ privacy norms.
China is all set to launch its national digital currency.
China is all set to become the world’s first major economy to issue a central bank digital currency. The People’s Bank of China has successfully completed several pilot projects involving DC/EP (Digital Currency Electronic Payment). As reported earlier, the central bank has proposed banning any yuan-pegged digital tokens in the new draft, effectively killing off any competitor to its central bank digital currency. PBoC published a statement late month soliciting feedback from the public on the new draft law. As reported earlier, digital yuan pilots have processed over four million transactions to date, totaling more than 2 billion yuan ($299 million).