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Home CryptoPotato News Central Bank Cryptocurrency Could Incite Social Unrest, Deutsche Bank Says

Central Bank Cryptocurrency Could Incite Social Unrest, Deutsche Bank Says

Deutsche Bank is out with it’s latest cryptocurrency report. The global banking giant has discussed central bank digital currencies (CBDCs) in great detail, and their effect on central banks, individuals, and governments.

In the discussion pertaining to individuals, DB says that CBDCs could encounter political resistance and encourage social unrest.

Central Bank Cryptos Could Make A World Of Difference

In it’s latest CIO Special report, German banking heavyweight Deutsche Bank observed that CBDCs could put users in a sweet spot with payments. Individuals stand to experience faster monetary transactions without third party interference.

Counter-party risk i.e., failure of one or more parties involved in a transaction, could be eliminated. DB went as far as to jibe cash transactions:

Depending on the CBDC technology used, money transfers could be anonymous and completely decentralized – as, ironically, old-fashioned cash transactions are now.

But there’s a catch.

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CBDCs Have Big Shoes To Fill

Deutsche Bank notes that central bank crypto assets need to make their use case scenario much more appealing than conventional cash. CBDCs must be efficient and ‘cash-like’ to overcome skepticism amongst potential users. And how will this happen? DB says:

To do this, the currency should serve as a medium of exchange, as a measurement of value and as a store of value. Payments need to be secure and simple. Universal access has to be guaranteed.

Over and above this, for central bank cryptocurrencies to make a difference and add to the existing currency system, they need to facilitate the execution of cross-border transactions in a ‘straightforward and cost-efficient’ fashion.

It’s worth noting that the bank had previously said that Bitcoin is too volatile which will enable cash to survive.

But There Will Be A Trade-Off Between Privacy And Convenience

Moving forward in its discussion of the impact of central bank digital currencies on individuals, DB pointed out potential issues pertaining to privacy and convenience in usage. As per available data, privacy loopholes don’t mean much for young folks (in general), the bank said in its report.

But is the same true for younger populations in emerging market economies? Will they be able to adopt a central bank cryptocurrency system much more readily than their counterparts in developed economies?

DB notes that this is a crucial question that needs addressing. Why? Because according to its previous research surveys, individuals are still skeptical about cashless payments. Especially in western European countries like Germany.

Transactions involving bank promissory notes are still widely prevalent. This leads Deutsche Bank to infer that implementing a central bank cryptocurrency system could encounter heavy political roadblocks. In the worst-case scenario, that is. Legislative resistance could have a trickle-down effect on society in general, leading to social unrest.

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