This post is originally published in Blockchain.News
CBDC, or Central Bank Digital Currency, has long garnered the attention of several nations across the globe. Countries such as China, South Korea, Brazil, and Japan are diligently working towards making their sovereign digital currency a reality, taking measures to accelerate its launch. Meanwhile, the Caribbean nation of Bahamas plans to release the Sand Dollar, the digital equivalent of its national currency, by Oct 2020. Contrarily, countries such as Australia do not consider CBDC to be a game-changer.
Yet, many dignitaries such as Tao Zhang, Deputy Managing Director of IMF, consider CBDC to be an efficient payment system that would drive the financial inclusion of those who are today left out of the ecosystem for several reasons. According to Christine Lagarde, the president of the European Central bank, the COVID-19 pandemic has hastened the need for digital alternatives for cash. Even though financial inclusion is higher now compared to a decade earlier, there are still 1.7 billion unbanked in the world. What are the reasons behind such a significant number of unbanked people? Can CBDC lead them towards financial inclusion?