CBDCs Taking Over Big Tech Payment Per US Fed Researcher
One thing that was very evident during the outbreak of the COVID-19 pandemic is that most institutions were diverting their services online and the financial sector is not left out. The mining of cryptos like Bitcoin has often attracted high transaction fees. However, according to reports from the US Fed researcher, CBDCs are a solution to this problem.
This has been the argument of many other experts. This is more so because many central banks are attempting to go more digital to promote customer experience.
Michael Lee, a New York Federal Reserve researcher, and some University professors elaborated on this in a block post released by them. They point to the fact that user data and payment information are left in the hands of tech firms who often misuse user-information as was the case with Facebook and visa. The researchers say that Cash protects the personal information of customers, unlike digital payment platforms which gather this information and in some cases share it with or between firms. Firms often use data collected from the customers to gain a competitive edge, which is what won’t happen in the case of cash use.
According to these researchers, a CBDC will be a more effective alternative to digital systems because it is more effective in protecting consumer information, especially in our current digital age. Although they mention cryptocurrencies as another option as opposed to bigger platforms, they stated that CBDCs are less expensive and eco-friendly. Especially because it ensures the protection of consumer information.
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