According to Fadi Aboualfa, head of research at cryptocurrency brokerage Copper, current CBDC models are not a practical cash substitute that consumers might use in everyday transactions.
Copper Head of Research Says CBDCs are Not Yet a Practical Alternative to Cash
The viability of the present models was questioned by Aboualfa.
There hasn’t been an actual CBDC model that is technically a replacement for cash, they all have several flaws and a central bank issuing a CBDC would be a mammoth undertaking for multiple reasons,
Aboualfa
Aboualfa’s Statements
CBDCs are in direct competition with commercial banks, the researcher noted. He explained that central bank digital currencies (CBDCs) can be issued in two different ways, either directly from a central bank or through commercial banks. However, he said that central banks do not have the ability or infrastructure to create a fully automated decentralized currency equivalent to cash.
Commercial bank-issued CBDCs could lead to chaos in decentralized open markets if scandalous news hits one of the banks,
Aboualfa
About CBDC’s Interoperability
The important aspect of CBDC interoperability, he continued, has not been sufficiently taken into account. Current designs, it is said, indicate too many blockchains with intermediaries in charge of the flow.
In the erroneous pursuit of common standards and blockchain use, how is everyone supposed to agree on the design and structure of a CBDC worldwide at the same time? The designs and models need to allow for integration, not vendor lock-in, and every central bank will have different considerations and requirements,
Aboualfa
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