Is digital currency the best alternative today?

In this article, the eight concept notes regarding the digital currency will be outlined. 

1: Investigating the value proposition of stablecoins for financial inclusion 

Stablecoins could potentially resolve challenges and unlock opportunities for financial inclusion. They provide benefits to the financially under-served, relative to pre existing forms of money.  

The aim is to provide better understanding of the potential value that stablecoins bring to financial inclusion, to help focus efforts and enhance global understanding.  

2: Investigating the value proposition of stablecoins for aid disbursement  

Stablecoins are viable for programmable disbursement of aid compared with other digital payment methods. The audiences are governmental, non-governmental and other organizations that deliver cross-border aid and seek to address challenges in aid delivery, such as transparency and cost-efficiency. This deliverable may provide valuable conclusions for  authorities, private sector and blended finance investors, and other aid organizations that wish to learn about the value proposition of stablecoins for aid delivery and disbursement.  

3: The role of the public sector and public-private cooperation in digital currency growth  

By the growth of CBDC and stablecoin activity, some institutions try to identify the roles they should play to support responsible innovation that protects citizens and the financial system from risks, while allowing for beneficial technological advances.

This deliverable aims to present a set of roles for policy-makers and public-sector institutions as they consider the CBDC and stablecoin models that might work best for their respective jurisdictions.  It aims to provide an option set for policy-makers and

public-sector institutions to understand the actions they could take with respect to CBDC and stablecoin development, growth and innovation.  

4: Regulatory and policy gaps of CBDCs and stablecoins  

Many digital currencies were invented to reduce many problems of transactions. There may be conflicts between the design of regulations and policies and the design of technology norms. Governments are keen to stay ahead of innovations whose purported benefits are as unknown as their risks.  

The purpose is how to avoid  incompatibilities and gaps when designing regulations and policies on CBDCs and stablecoins.  

5: Consumer protection risk mapping  

Trust in digital currencies is vital for their adoption. Consumer access to digital currencies must come with adequate education and protection. Also, the level of protection must be balanced with the need to support competition and innovation.  

The risks may include those to security, privacy, deposits, liquidity, and fraud. Relevant It is because of promoting awareness of the importance of consumer protection and guide the design of a balanced approach towards consumer protections for digital currencies.

6: CBDC technology decision framework  

The main issue is to create a clear framework that helps central banks assess the CBDC technology solutions and platforms that would support their target CBDC form and design, and their main policy objectives.  

By offering a technology assessment framework, the deliverable will facilitate discussions between public and private stakeholders to foster collaboration, and help the private sector understand CBDC requirements.  

7: The spectrum of privacy and confidentiality options  

Central banks evaluate the issuance of CBDC and consider consumer privacy & safety. They will need controls against black money, while making it easier and cheaper to move money around for legitimate transactions.  Risk analysis will be done to keep the information private & confidential. 

8: Defining interoperability  

As stablecoin providers and systems enter the market, the challenge of how well these systems can interact and transact with each other will become ever more complex.  Interoperability is valuable in achieving the global efficiencies generally desired from digital currencies & it will help stablecoin providers and central banks in development of digital currencies.  

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