Banks and CBDC

UK legislators and the Central Bank are discussing a possible release of central bank digital currency (CBDC). Discussions are slow and the release of the British CBDC is expected to take place earlier in 2-3 years. The legislature even recommended that bankers be very cautious about the "state" crypto.

What seems to be the problem? Writing a script for a new crypto is a problem that can be solved quite quickly. It’s not a technical problem, the British care about the impact of innovation on the entire financial infrastructure.

Traditionally, the strong banking lobby sees the crypto as a real threat to its monopoly position.

Let’s see what’s going on with the banking system.

Do you have bank cards, do you have money in your account? In fact, this money is your only nominal. The bank uses it, it can be blocked, the bank can write off commissions, set its own rules for transfers.

You cannot have fiat cashless money outside the bank. This is a bank privilege that will be protected by all forces.

Now imagine: there is a crypto that brazenly ignores the banks. You have your own wallets operating in a decentralized blockchain and, therefore, independent and owned only by you.

The banking lobby is in a tough situation. 

On the one hand there is a real threat, which five years ago could still be neglected, on the other there is an impossibility of directly attacking crypto, because now it also has a serious lobby. The scandal will lead to reputational losses, and the result will be far from expectations. 

Regulators' actions in the US and Europe to restrict crypto business are very much like the work of the banking lobby. And what to do with the banks, if "state" cryptocurrencies will be issued and the use of cryptocurrencies will be generally expanded?

Everything is simple: you need to do your natural job, namely to attract deposits and distribute credits. This can be done in both fiat and crypto, especially since the appropriate infrastructure exists. 

However, with free privileges, you will have to give up, and this is good. It’s good for everyone except banks.

#UKCentralBank #CBDC #bankinglobby