CBDCs not worth the costs and risks, says former BoE advisor
Central banks worldwide are pushing forward with digital asset projects despite the various crypto industry implosions over the past 12 months. China has rolled out its central bank digital currency (CBDC) to several cities, and it was available for use at the Winter Olympics.
Many other central banks, including the Bank of England, are considering how to roll out a CDBC, while Nigeria’s CBDC has had poor uptake so far. India has already launched a pilot scheme, while Mexico has confirmed the launch of a digital peso.
However, Tony Yates, Financial Times writer and former senior advisor to the Bank of England, advises against CBDCs. According to Yates, “The huge undertaking of digital currencies is not worth the costs and risks.”
CBDCs are already in place in most countries as most countries already have digital versions of cash, coins and notes. Yates, therefore, questions the motivations behind global rollouts of CBDCs, calling them “suspect.”
CBDCs could be a way of quashing crypto, including decentralized currencies such as Bitcoin (BTC). However, “Cryptocurrencies are such ban candidates for money,” he explains, adding:
Yates’ take on Bitcoin is unsurprising: he has tweeted several times about Bitcoin, claiming that most of Bitcoin’s use is “illicit” and “speculative.”
I would guess that most of the use is 1) illicit, and not discouraged by central bank provision and 2) speculative; if CBDC were to cause a large price drop, this could wipe out and discourage a lot of users.
Since Bitcoin is using a public ledger that's available for everyone, its use for illicit purposes has decreased steadily over the years to less than 1% of total transactions, reports show.
On top of that, the layer-2 Lightning Network allows instant
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