The CBDC Idea – Officializing The Crypto-Currency

So, what happens to the statutory currency issued by the central bank?

In modern times where we are moving to a cashless world, will virtual currency, which is very good for settlement and remittance, and its network influence the way of legal currency as well? Let us forecast what kind of future will be realized from the viewpoint of the central banks.

“CBDC” to be studied around the world

CBDC (Central Bank Digital Currency) stands for the digital currency issued by the central bank. (CBCC – Central Bank Crypto Currency, meaning the virtual currency issued by the central bank)

Points To Be Clarified Here Are: 

  • Difference between CBDC and virtual currency.
  • Difference between payment by CBDC and mobile payment.

Regarding the former, while CBDC uses blockchain technology like virtual currency, CBDC is centralized currency, the government issued to the last.

Regarding the latter, although CBDC certainly has functions like mobile payment at first glance, mobile payment is one of the payment methods that allow you to conduct credit transactions via a bank account. On the other hand, it can be said that CBDC utilizes network technology to record payment processing and distribution.

Trends in Each Country

Beginning in 2015, the central bank in many countries, especially in Europe, has been researching the issuance of CBDC, and in some countries, the talks have progressed more specifically, and it is in the situation of considering introducing it as an official tender.

Payment at stores and remittance between individuals are becoming an overt norm in some developed countries. While some industrialized nations of Asia and America are still considering its official introduction and many countries are already planning to introduce it in 2018 by a clear purpose and system development.

Advantages and Disadvantages of CBDC

So, what kind of merit or disadvantage does the government actually generate by issuing digital currency? I will introduce some of them.

  • Settlement, Efficiency Of Remittance, Transparency:

Settlement by CBDC does not go through third party institutions such as banks. As a result, you can trade at lower cost compared with mobile payment. To get a trading opportunity to match your budget requires comparing available trading platforms. To get updates from the platforms, you need signals, such as the ones that Bitmex provides.

  • Reduction Of Banknote Maintenance Cost:

It can reduce the cost of printing paper money, distribution to the whole country, and security. Considering the number of issues issued every year, you can see that considerable cost savings will be achieved.

  • Private-Sector Financial Intermediation Shrinks:

If CBDC spreads widely to individuals, private bank deposits will shift to CBDC. This creates a problem that the fund mediation system becomes unnecessary. It can be expected that not only banks but also intermediaries in settlement will be affected.

  • Response To The Elderly:

In one of the Scandinavian, a developed country in a cashless society, the cashless rate already exceeds 95%, so many catering stores cannot pay cash or even ATMs in rural areas. In such countries, it is expected that application of CBDC will be completed relatively easily, but it cannot be ignored, on the other hand, that there are layers that are difficult to deal with.

In CBDC, there is a possibility that the system feels complicated more than mobile payment, so it seems that at least cash will not go out.

  • Introduction Possibility In Industrialised Asia:

Indeed, the virtual currency is gaining popularity in Asia, but it is a few percents of the population as a whole, and in addition to being a cash state, CBDC issued by the Bank in a super-aging society widely spread throughout the people. It is thought that it takes time to disseminate it.

In addition to being very cost effective by cashless, our individual shopping will be more convenient.


Research on CBDC has been progressing in various countries since 2015. The CBDC covered this time is very interesting to change the traditional currency way like the virtual currency.

I do not know how long it would take if it were to be introduced in all Asian countries, but let’s pay attention to it.

And, as with CBDC, virtual currencies are expected to have a concrete shape after next year, so let’s expect.

Jonny Millers