In its latest cryptocurrency report, Deutsche Bank (DB), a global banking giant, discussed the premise of central bank digital currencies (CBDCs) in very great detail. In particular, the bank focused on its possible effect on the individual, the central bank, and the government at large.

Potential For Social Unrest

However, DB had raised some interesting arguments when it came to the individual, warning that political resistance and even social unrest could be encountered by the implementation of a CBDC.

The German heavyweight banking firm, through its latest CIO report, observed that CBDCs could stand to put users in a sweet spot when it comes to payments. This will allow an individual to have no need for third-party interference, all the while experiencing faster monetary transactions, as well.

CBDCs Need To Innovate

Counterparty risks, that is, the failure of one or more parties involved within the transaction, could also be completely eliminated. DB actually poked fun at cash transactions, highlighting that, depending on the CBDC technology used, these transfers could be just as anonymous and decentralized as old-fashioned cash transactions.

DB took note, however, that these CBDCs need to be made in such a way to have their use case scenarios be significantly more appealing than conventional cash deals. As such, DB noted that these CBDCs must be very “cash-like” and efficient in order to break through the overall skepticism.

According to Deutsche Bank, this will happen if the CBDC itself can serve as a measurement of value, a medium of exchange, and a store of value all a the same time. Universal access must be guaranteed with this CBDC, as well as secure, simple payments.

Risks To Privacy Noted

DB also noted that, all this included, it must also be different, adding to the existing monetary system. In order to do this, DB noted that it needs to be capable of facilitating cost-efficient and straightforward cross-border transactions, something that’s very hard to do with standard fiat.

It should be noted, however, that Bitcoin won’t be this, in DB’s eyes. In the past, the German banking giant stated that Bitcoin’s volatility is simply too much for cash to be replaced by it.

DB, during its discussions regarding the impact CBDCs would have on the individual, highlighted the potential risks in regards to privacy and convenience. The bank revealed in its report that young people, generally speaking, don’t pay much mind to privacy loopholes.

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