From bitcoin to ethereum, digital currencies have been heralded as a new dawn for money. They allow for faster, cheaper transfers, promote financial inclusion and offer greater privacy, according to their proponents.
However, the promise of anonymity has also made them a favoured financial medium for fraudsters and criminals. And beset by explosive volatility, they fall far short of being a viable payment method. But what if that wasn’t the case?
For monetary authorities worldwide, this is the trillion-dollar question. Spurred by the crypto sector’s meteoric rise, dozens are looking at launching their own central bank digital currencies (CBDCs) — virtual money that replaces cash with electronic tokens.