Why Are Central Banks Trying To Create Their Cryptocurrencies?

The coronavirus outbreak has accelerated the cryptocurrency’s exit from the marginal state and pushed it to the center of the economic agenda.

Today, the global economy more than ever needs a payment instrument that one can pay quickly and cheaply without unnecessary intermediaries such as Visa or Mastercard.

China has already been testing its “digital yuan” with the US, UK, France, South Korea, and other countries working on similar steps. Currently, 20% of 66 central banks reported that they would issue a Central Bank Digital Currency within the next six years. With all these actions behind the scenes, it seems inevitable that state digital currencies will become widely available to ordinary citizens in the coming years.

However, few understand what this will change, so let us explore why centralized digital money is wanted to be produced by states and how it will evolve in the not too distant future.

What is a central bank digital currency?

Central Bank digital currencies are traditional currency, but in digital form, issued and managed by a country’s central bank. A national central bank digital currency is designed to meet the needs of local economies at different development stages for a variety of…