Home Crypto Altcoin News World Economic Forum's project lead compares stablecoins with CBDC

World Economic Forum’s project lead compares stablecoins with CBDC

In a press release shared with Crypto Insider earlier this week, Amanda Russo, the public engagement lead at the World Economic Forum’s (WEF) Center for the Fourth Industrial Revolution, revealed that “central banks are emerging as some of the most forward-looking users” of blockchain and distributed ledger technology (DLT).

Around 40 central banks worldwide are experimenting with various use cases related to blockchain technology, including issuing a central bank digital currency (CBDC). This, according to a recent whitepaper published by the WEF, states that the Bank of France, “with project MADRE, has fully replaced its centralized process for the provisioning and sharing of SEPA Credit Identifiers (SCIs) with a decentralized, blockchain-based solution. “

In comments shared exclusively with Crypto Insider, Ashley Lannquist, the Project Lead, Blockchain & DLT at World Economic Forum, noted that “cryptocurrencies and digital currencies [those that operate on distributed ledger networks] are a breakthrough because they enable people to move money digitally, very rapidly, and very affordably without needing to operate through, trust, or share private information with a third party. This was not possible before DLT.”

Settling Cross-Border Payments, Remittances With DLT-Based Digital Currencies

Lanniquist, an economics graduate from Columbia University in the City of New York, added that “cryptocurrency can be quite impactful depending on the region; for those in regions with high inflation or authoritarian control over money and fund flows, cryptocurrency can be extremely valuable to enable people to save money and move money freely without suffering from inflation or government censorship or funds seizure. It can also enable more affordable payments overseas.”

Going on to mention that CBDCs “can be impactful, particularly in emerging market countries [that] have underbanked populations or fragmented payments systems,” she also noted that “a CBDC issued for the general public’s use (retail CBDC) can provide a streamlined way for people to access savings accounts and send digital payments to each other. It can also help with cross border payments and remittances, helping people save money.”

She continued: “Moreover, in the future, in regions with diminished use of cash such as Scandinavia, CBDC can provide an important alternative for (digitized) fiat currency issued by the central bank instead of physical cash.”

The Stablecoin Market

Sharing her views about the emerging stablecoin market exclusively with Crypto Insider, Lannquist said: “Stablecoins issued by the private market, such as those in existence today, seek to enable DLT transactions where users aren’t vulnerable to the price fluctuations of the crypto asset they employ. This is important, as [digital] asset prices are famously volatile. Today’s stablecoins use various means to reach this goal. While a successful model may emerge in the future, as of today, no model of stablecoins has yet proved itself as fully reliable or resilient to the forces that affect cryptoasset pricing.”

While comparing stablecoins to CBDCs, Lannquist noted that “CBDCs achieve a similar goal as most stablecoins, although likely more credibly. Currency issued by a credible central bank is the only currency in which you can be fully confident it is redeemable 1:1 by the central bank for the fiat currency in question. Because the forms of stablecoins we see today are all subject to important vulnerabilities, it follows that CBDC (if issued) could be the most reliable form of blockchain-based digital currency in terms of price stability.”

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The above is to be considered opinion and not investment advice in any way, as an unbiased media, no one interferes with the Editorial content of CryptoInsider.com, writers have freedom to choose their own direction, members of Crypto Insider do not participate in trades based on content.

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Omar Faridi
Omar Faridihttps://cryptoinsider.media
I enjoy writing about all topics related to Bitcoin, Blockchain, and other cryptocurrencies. The topics that interest me most are crypto regulations, quantum resistant blockchains, Ethereum and Bitcoin Core development, and scams orchestrated under the guise of ICOs. My academic background includes an undergraduate degree in Computer Science, with a minor in Mathematics from the University of Nevada, Las Vegas. I also possess a Master of Science degree in Psychology from the University of Phoenix. I've been writing about cryptocurrencies and distributed ledger technology (DLT)-based platforms since December of 2017. To date, I have written about 800 articles - which have all been published. I have also edited about 300 articles. While completing my academic coursework, I engaged in independent study programs focused on public-key cryptography and quantum computing. My professional work experience includes working as an application developer for the University of Houston, data storage specialist at Dell EMC, and as Teacher of Mathematics in the United States, China, Kuwait, and Pakistan.

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