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bis digital currency paper predicts money will be unbundled

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Today the BIS posted a operating paper entitled “The digitalization of money,”in which the unbundling of cash is predicted. Fiat cash is predicted to have 3 units of functions. It need to act as a shop of fee, a medium of trade, and a unit of account. However, as cryptocurrencies are already showing, a few virtual currencies or cash would possibly offer the shop of fee function.And digital money is associated with a platform not a country The 3 University lecturers that wrote the paper see a re-bundling occurring with one of a kind functionality, which includes for facts amassing or social community sites.The money transfer hypothesis shows that the differences in currency competition include data packets and network services. In other words, the attractiveness of digital currencies is based on their algorithms, privacy policies, and platform counterparts. Different currencies will attract users with similar characteristics. Some people prefer confidentiality, while others want the results of this data as the best advice to trade that confidentiality. Not mentioned in the document, but similar to insurance companies, if insurance companies can track your driving habits, they can offer higher tariffs.When currency is tied to the platform, the role of the bank is challenged not only in terms of payment, but also in other functions, because they lose their primary connection.Digital currencies are changing the relationship between public and private currencies, and cash may disappear, just like what happened in Chinese cities. As a result, the government was required to issue central bank digital currency (CBDC) to maintain independence.

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