Crypto

Which Countries Want to Adopt Crypto or Central Bank Digital Currencies (CBDC) as Legal Tender?

Which Countries Want to Adopt Crypto or Central Bank Digital Currencies (CBDC) as Legal Tender?

Central bank digital currencies are the latest trend in the world of money, but will they ever be adopted as legal tender? Or will they simply become another option that consumers can use with a money transfer app

An examination of the pros and cons of central bank digital currencies can help us determine whether they’ll be used as part of everyday life in the future. 

In this post, we're going to discuss cryptocurrencies and how they apply to the central banks and currencies around the world. 

We'll also go over how easy it is to apply cryptocurrency to a money transfer app that will allow you to send funds to anyone around the world.

Cryptocurrencies

Most countries have begun to accept and acknowledge cryptocurrencies. However, many central banks and financial institutions still see them as a threat.

So much so that they’re adopting anti-crypto laws and regulations. 

The world is changing rapidly, however, and it’s likely that we’ll soon see central banks adopt cryptocurrencies for use in their own monetary systems. 

In fact, if you look at some of the apps that are available today via mobile phone, you'll find that there is a trend on the forefront. 

A money transfer app seems to be moving forward with this cryptocurrency endeavor. But what about countries as a whole?

Here are some of those that may be early adopters:

China 

China has been one of crypto’s biggest foes since 2017. That's when rumors began swirling about a cryptocurrency ban. While no nationwide action has been taken yet, there have been many smaller developments along these lines: 

In 2017 alone, Chinese government agencies shut down numerous cryptocurrency exchanges and banned ICOs (with varying levels of success). 

However, in May 2018 President Xi Jinping issued two statements acknowledging blockchain technology while also calling for better regulation. 

Not to mention, an outright ban on cryptocurrencies isn’t completely out of the question. 

Russia 

Russia doesn’t seem to have quite decided where it stands on cryptocurrencies. On one hand, Russian President Vladimir Putin recently said,  

"Bitcoin...is not a real currency. It does not meet any of the requirements that are usually applied to physical currencies. It is not backed by anything."

At first glance, such remarks might lead one to believe Russia won’t tolerate any sort of cryptocurrency or digital payments system. 

But consider another recent statement from him, made during an October 2020 Q&A session at Moscow State University: "We don’t reject anything, but there are serious...problems concerning...regulation. One of our partners just shot himself in the foot - I am referring to China."

Central Bank Digital Currencies

Whether they’re a distraction from a bank’s day-to-day activity, a tool for revolutionizing its business model, or simply wishful thinking from higher-ups in their organization, central banks seem to be very interested in digital currencies. 

In fact, since 2015 almost every major central bank has formed some kind of digital currency working group. They all have one thing in common. They want to understand what it takes to issue a government-backed cryptocurrency.

Their exact motives vary from country to country. 

Some, like China and Russia, have been attracted by crypto’s benefits for people who live in countries with economic sanctions imposed by western nations.

Others see central bank-issued crypto and CBDC as a way to open up new markets and increase financial inclusion. 

And some, like Sweden, are motivated by their responsibility to protect their citizen’s digital privacy.

Money Transfer App

Many people have moved their funds efficiently with a money transfer app. This app allows the user to send currency to those they wish to make payments too. 

However, there are specific words that many may find puzzling at first when it comes to cryptocurrency and what it has to do with their money transfer app.

Cryptocurrency & Blockchain

The buzzwords in today’s world are cryptocurrency and blockchain technology. But what are they? 

Cryptocurrencies are digital assets.

The design of cryptocurrency aligns with the purpose of being a medium of exchange. It uses cryptography to secure transactions, verify them, and keep them recorded in a decentralized ledger. 

Essentially, cryptocurrencies are digital representations of value. These currencies aren’t under the control of a government or bank. 

The basis of the value is from the collective belief in their currency value. A more specific form of cryptocurrency is crypto-currency.

This crypto's use ranges from paying for goods to affording services using blockchain technology. Blockchain is an online ledger where the recording of all crypto transactions transpires.

In fact, this record is both chronological and public. It serves as an electronic system for verifying ownership of crypto-currencies.

Is blockchain technology and cryptocurrency just a fad, passing fancy, something that will quickly become obsolete in today’s fast-paced technological world? 

According to research conducted by IMF (International Monetary Fund), between two-thirds to three-quarters of all countries could adopt a centralized digital currency as legal tender by 2023.

With the increasing popularity of cryptocurrency, countries all over are trying to incorporate cryptocurrencies into their economies. 

While some countries like Venezuela and Ecuador are announcing that they are launching their own cryptocurrencies (Petro and DineroSo respectively), some other countries like Iran, Turkey, Venezuela, China, and Russia are considering adopting digital currencies that central banks are planning to issue for retail payments.

Final Word

For consumers, adopting cryptocurrencies in everyday life won’t just be possible - it will be required. 

Thanks to a money transfer app, people are finding that payments can be not only quicker, but more efficient in the world of cryptocurrency.

Individuals and businesses will no longer have to rely on central banks, credit card companies, etc., when sending money overseas. 

If they want to send $1000 to Paris for a trip next year, all they'll need is $1000 in their cryptocurrency wallet that they get via a money transfer app. 

Once the transaction is complete, they'll receive Euros (or whatever currency they've selected) into their bank account (which will also work like any other bank account).

This means that payment companies like Visa, Mastercard, etc. will no longer be needed.  Instead of paying a flat fee of 3% on every transaction, people will pay 1% for cryptocurrency transactions. That's because they won't need to rely on middlemen to confirm their transactions for them. 

Instead of waiting days or weeks for their payment to arrive in Paris (if it ever does), they'll receive it within minutes with little risk of fraud. 

This is all thanks to cryptocurrencies' distributed ledger system. This is no longer a pipedream.

Why?

This is because platforms such as a money transfer app allow every peer on the network to confirm all others' payments.

Kadijat Okeowo

At the intersection of digital/growth/product marketing, business and tech. Constantly learning, unlearning, re-learning. Passionate about products that solve the problems Africans have. Happily helping Afriexapp reach its next million users.