The Central Bank Digital Currency Versus Reoccurrence of Financial Crises — Principled Discord Pt.3
The Covid-19 pandemic made us rethink not only our everyday work habits but also the usage of cash. In the spring of 2020, according to the Bank for International Settlements, the number of internet searches pertaining to both “cash” and “virus” was at record highs. People were concerned about the transmission of the virus through banknotes.
Despite, the scientists’ reassurance in very low transmission rates through banknotes, people have avoided usage of cash lately. Moreover, the BIS reports that since the beginning of the Covid-19 pandemic there has been a “structural increase in the use of mobile, card, and online payments.”
In juxtaposition, many proponents of privacy lament the “Cashless Society” agenda fearing the death of financial privacy. In this week’s episode of Principled Discord, Thierry Arys Ruiz, CEO/founder of TARCO NGO and AgAu AG interviewed Michel Girardin, Economist, and Lecturer in Macro-Finance at the University of Geneva.
Professor Girardin is writing a book on the reoccurrence of the financial crises and the possible increase of financial stability through Central Bank Digital Currencies. Professor Girardin believes that “driving forces to make the CBDCs successful is the facilitation of transactions which includes the speed, price, and transparency of the currency flow…” Moreover, Professor Girardin, believes that the Covid-19 pandemic has triggered an even faster development of the CBDCs.
Thierry Arys Ruiz objects that “the usage of the blockchain technology might not be the right fit for the centralized currency; since the purpose of the digital currency is to be decentralized at the end.”
According to Professor Girardin, “the main purpose of the Central Banks moving toward the digital currency is to retain the control over the monetary system from the private firms which are profit-seeking.” One of the main questions derived from the conversation is to know if Central Banks will be able to ensure financial privacy within this transition.
Watch the full conversation of the two industry leaders discussing the purpose of CBDCs and follow Michel Girardin to know more about how to prevent the reoccurrence of financial crises in the future. Follow the link here and don’t forget to subscribe to Principled Discord’s YouTube channel to watch more episodes.