Fitch warns that the increasing use of digital currencies by central banks may “disrupt the financial system”
May 23, 2021, 17:59 GMT
At the same time, analysts predict that it could prevent the formation of digital payment systems oligopolies.
The wider adoption of central bank digital currencies (CBMs) involves both risks and benefits. Depending Report from Fitch Ratings.
On the positive side of this potential measure, analysts point out that CBMs could prevent the formation of an oligopoly for digital payment systems, a trend in the world that uses less and less cash.
“The widespread use of confidence-building measures could undermine the control of these providers over payment data and improve central banks’ ability to track financial transaction data, thus helping to prevent financial crime,” Fitch notes.
The agency warns, however, that “if CBMs provide less privacy than cash, or severely limit the amounts held in e-wallets, some people may be discouraged from using them.”
At the same time, analysts predict that the expansion of confidence-building measures “could disrupt financial systems if they do not manage the associated risks”. Among these risks, they see the potential for a rapid flow of assets into cryptocurrency bank deposits and greater cybersecurity threats.