The People’s Bank of China is one of a handful of central banks all over the world currently pondering the possibility of issuing a digital version of a country’s currency. Here is why this might be a game changer
1. Better oversight
Private operators offering payments platforms have proliferated in recent years, in some cases fulfilling functions such as giving loans that used to be the purview of banks. A centrally issued digital currency may lead to better regulatory management over digital transactions.
2. Increased accessibility
Digital currency is potentially easier to distribute and access than paper currency, since physical infrastructure such as ATMS would be replaced by the likes of digital wallets on smartphones.
3. Radical transparency
Paying in cash leaves no paper trail, figuratively speaking. The ease of tracking digital currency could lead to a whole new level of radical transparency, helping to eliminate black market transactions. But that could also mean citizens may lose a lot of privacy when it comes to their financial activities.