Since the inception of the cryptocurrency industry, it has been met with several criticisms and jabs from the naysayers. Most of the critics claimed that the industry would never gain the acceptance of the masses because of the lack of transparency and trust within the system.
Cut to a decade later and it has become evident that the world is on the verge of a new technological boom. Cryptocurrencies and blockchain technology have come such a long way that traditional organizations such as the Deutsche Bank Wealth Management group are also siding with the concept of virtual assets.
In a recent report released by the Deutsche Bank Wealth Management, it was stated that the establishment of Central Bank Digital Currencies could better the world of financial relationships. The group suggested that CBDCs can operate in several forms but work best trough direct interaction with central bank accounts. According to the report, CBDCs need to adhere to two major factors: provide increased transaction speed, security, and transparency while maintaining a more effective monetary policy.
CBDCs can bring in additional benefits such as combating payment fraud and ensuring “good corporate governance”. Enforcing monetary policies has always been a painful procedure because of the sheer number of caveats in financial laws. With CBDCs, banks can try to remove the option to hold cash on investors’ balance sheets which makes transactions much more seamless. CBDCs are also expected to allow banks to lower their interest rates and onboard more users to their fold.
Although regulators and lawmakers are ready to take a leap of faith with the new technology, they still remain wary of the dangers associated with the industry. Multiple reports of hacks and fraudulent activities have forced even the Deutsche Bank Wealth Management to stay on their toes when it comes to crypto. Their report said:
“CBDC are currently being investigated by several central banks, with China and Sweden having undertaken trials. Major uncertainties remain about how full-scale CBDC would operate and about their implications for capital markets. Further, there are important concerns about potential threats to individuals’ privacy. But, as the report points out, CBDC may soon become part of our lives, so societies need to learn how to use them best.”
The bank joins several other organizations all over the world in experimenting with cryptocurrencies. Analysts and experts in the field claimed that it was only a matter of time before virtual assets become a part of the daily lore.