Central Bank Digital Currencies (CBDCs) and private sector cryptocurrencies are predicted to have the biggest disruptive impact over the next 20 years, according to the Future of Payments Report 2021 by PwC.
“CBDCs — digital tokens or electronic records that represent the virtual form of a nation’s currency — along with private sector cryptocurrencies are predicted to have the greatest disruptive influence more than the next 20 years,” mentioned the report on Saturday (June 5, 2021).
In the PwC survey, economic services organisations in Europe, the Middle East and Africa with more than US$5bn in revenues cited “market uncertainty and potential disruption,” such as the introduction of CBDCs, inside their best 3 issues.
As an instance, the report cited Diem, a cryptocurrency proposed by Facebook. Backed by a basket of sovereign currencies, such cryptocurrencies “could replace account-based payments with a tokenised system of non-sovereign payment systems,” the report mentioned.
The PwC report also predicted that scepticism of central banks about the prospective of private cryptocurrencies to undermine the conduct of monetary policy may well shift.
“Scepticism within central banks about the potential of private sector cryptocurrencies to undermine the conduct of monetary policy may begin to shift, as some players have recently said they’re prepared to facilitate use of such digital assets,” the PwC report mentioned.
A current BIS survey suggests that 60 per cent of central banks are thinking about CBDCs, and 14% are actively conducting pilot tests, the report noted.
China may well be initially to launch its digital renminbi
“Observers believe that China may be the first to launch its digital renminbi — or “e-yuan” — at the Winter Olympics next year, in what may well be seen as a prelude to the decentralisation of finance,” the report mentioned.
Towards cashless
The report mentioned that the economic services business is in the midst of a considerable transformation, accelerated by the COVID-19 pandemic. And with the essential function getting played by, digitisation in the economic lives of more and more of the world’s population, electronic payments are at the epicentre of this transformation.
Global cashless payment volumes are getting predicted to raise by more than 80 per cent from 2020 to 2025, from about 1trillion transactions to just about 1.9 trillion, and to just about triple by 2030.