Australia’s Reserve Bank is launching a pilot program over the course of the next year in collaboration with the Bank for International Settlements (the central bank of central banks) to test the “benefits” of a blockchain ledger based digital currency system. The central bank is added to a long list of participants in BIS efforts to introduce CBDCs (central bank digital currencies) with the target goal of launching them globally by 2025-2030.
It’s important to note that substantial economic changes would have to occur within the next few years in order to make CBDC a viable option for the general public. Though many people use electronic transactions as a matter of convenience, a large portion of the population still prefers cash. In the US, surveys within the last few years show that at least 37% of Americans still choose cash over other methods of payment like credit and debit cards. In Australia, the number stands at around 32%.
The usage of digital payment systems also does not necessarily denote a societal shift away from the idea of cash, it only shows a preference for convenience. People still like to know that cash exists as an option if they need it or want it, but central banks are working diligently to remove physical cash as a choice within the next 8 years.
CBDCs, much like all blockchain based currency mechanisms, are inherently devoid of privacy. By it’s very design, blockchain tech requires a ledger of transactions than can be tracked by governments if they so choose. Physical cash, though fiat in nature, is at least anonymous….