According to The Korea Herald report, Central bank-backed digital currencies and private cryptocurrencies will coexist for a while, despite rising regulatory walls set by the government to counter virtual coins, experts at a global webinar session said Thursday. Noting that cryptocurrencies and CBDCs are “two different animals,” they will coexist for now partly because current cryptocurrencies are not actually solving payment problems, experts said at a webinar co-hosted by The Investor and ANN.
“Most cryptocurrencies are speculative and used as a means of storage.”
“How many of them (cryptocurrencies) are solving actual payment problems? Most of them are speculative and used as a means of storage,” said Nelson Chow, chief fintech officer of the Fintech Facilitation Office at the Hong Kong Monetary Authority. Chow further noted that some central bank digital currency, or CBDC, projects such as Multiple CBDC Bridge could solve decades-old problems for cross-border transactions. Multiple CBDC Bridge is a wholesale CBDC co-creation project between the Hong Kong Monetary Authority, Bank of Thailand, the People’s Bank of China, and the Central Bank of the United Arab Emirates.
It is unlikely that the emergence of CBDC projects would make crypto obsolete.
John Kiffmeiste, a former senior financial sector expert at the International Monetary Fund, said that under the current regulatory environment, it is unlikely that the emergence of CBDC projects is now numbering nearly 60 according to Kiffmeiste’s data, would make crypto-assets obsolete. “CBDC has to operate within confines of tax regulations, anti-money laundering, KYC (know-your-customer) and so many other regulations whereas cryptocurrencies don’t operate in that environment,” the economist added. Central banks across countries are actively exploring digital currencies. Countries including Canada, USA, Russia, South Korea, and several others are working on CBDCs.