Deutsche Bank has published its latest report on cryptocurrencies, in which it deals with central bank digital currencies (CBDCs) in great detail, and their impact on central banks, individuals and governments.
At the center of the discussion on individuals, Deutsche Bank says that central bank digital currencies, or CBDC, could encounter political resistance and encourage social unrest.
Central bank digital currencies can make a big difference:
The Deutsche Bank report said that central bank currencies could put users in a good place with financial payments.
Where individuals can experience faster cash transactions without the involvement of a third party.
The risks involved in the middlemen can also be eliminated. Deutsche Bank also informed, through its report, of the following:
With central banks relying on cryptocurrencies, money transfers can be completely anonymous and decentralized.
Central banks have a lot to develop:
Deutsche Bank notes that central bank digital currencies need to make their use-case scenario more attractive than conventional cash.
Where CBDCs need to be effective and cash-like to overcome suspicions among potential users, Deutsche Bank says:
The currency should function as a medium of exchange, a measure of value and a store of it.
Payments should be safe and simple, and universal access must be guaranteed.
In addition, in order for central bank digital currencies to reserve a place in the current currency system, they need to facilitate the execution of cross-border transactions in a direct and cost-effective manner.
A trade-off between privacy and comfort:
Deutsche Bank pointed out potential issues related to privacy and usability.
According to the available data, the privacy vulnerabilities are viewed differently in different places and the strength of the economy.
According to previous surveys, individuals are still skeptical about cashless payments, especially in Western European countries like Germany.
Also, transactions involving bank promissory notes are still widespread.
This led Deutsche Bank to the conclusion that the implementation of the central bank's digital currency system may face heavy political hurdles.
Where legislative resistance can have a negative impact on society in general, leading to social unrest in the eyes of Deutsche Bank.
