Digitalization Or adopting technology to change the business model (Business Model) or change the work process (Process) is determining the future of money. But traditional central bank money from commercial banks will still predominate. Moody’s predicts in a new report. which basically Reliability is more important than performance.
Many new payment solutions are supporting the use of commercial bank money. For example, “We believe digital wallets. […] will support the dominance of commercial bank money as long as bank accounts remain their primary source of digital currency.”
However, digital wallets could threaten bank earnings. by separating them from the transaction process
“CBDCs are seen as the safest form of digital money,” said Moody’s, referring to central bank digital currencies. They do not require deposit insurance and promise fair returns and easy payment. especially cross-border payments But technical and policy complexity hinders its implementation. The report adds that most CBDCs are intermediaries. by maintaining the position of the commercial bank
And in terms of Cryptocurrencies “Even though it’s been more than a decade But they still do not fulfill the fundamental function of money,” stated Moody’s. Ability to transfer at any time and ability to program But factors such as volatility, high transaction fees, low throughput, user experience issues. and often with limited liquidity These things outweigh those advantages.
As for Stablecoins, it states, “Stablecoins suffer from conflicts of interest. As operators are incentivized to invest in more risky assets to increase their earnings,” the report said, however, “the use of stablecoins may increase slightly.”
“Cryptocurrencies issued by private companies It can have a big impact on the form of payment, however. […] No projects have been successful until now. And many countries are likely to disallow its use on a large scale.”
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