Nothing else can be hidden: the world faces a digital money revolution

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Nothing else can be hidden: the world faces a digital money revolution
Nothing else can be hidden: the world faces a digital money revolution
6 July, 17:59Economy
A complete transition from cash to digital currencies will revolutionize the entire global banking and monetary system.

Expert of the PRUE G.V. Plekhanov Andrey Mikhailishin analyzed the situation with the gradual transition of financial institutions of the world to digital currencies, calling this process a "money revolution".

It is known that by March of this year, 86% of all central banks in the world began to create their own digital currencies (CBDC), that is, instead of printing money, they will issue electronic banknotes or accounts secured by legislation and government loans. This, by the way, is the difference between digital currencies and cryptocurrencies that are not issued.

This trend has intensified due to the need to respond to a decrease in the use of cash in some countries, which was especially noticeable in the coronavirus pandemic. Fast and convenient digital payments have become more common and more versatile. Society is gradually moving away from cash to digital fiat currencies.

Next, we are waiting, according to the expert, a complete transition to digital money, and this will lead to many consequences for the entire banking and monetary system.

Among other things, this transition leads to a regime of constant state monitoring of all transactions of national currencies, to the disappearance of "over-the-counter" transactions (for example, payment for a plumber's work outside of working hours or gray wages in an envelope). For all operations, people will be forced to use national digital currencies, and the authorities will control.

With the disappearance of paper money, it will be impossible to hide from the state, any operations will leave traces. On the one hand, this will help in the fight against crime and fraud, and on the other hand, it will help the authorities to stimulate the spending of certain groups of the population on a certain type of goods or services. In particular, by lending to the middle class to boost consumption and spur national growth.

Governments will be able to give them to citizens directly, on special conditions for each socio-economic group, and this will lead to the nationalization of finance around the world.

CBDC can become an important tool for central banks to provide secure payment means in parallel with the wider digitalization of people's daily lives, the expert believes, but for this, central banks must gain great trust in themselves from citizens, acting carefully, openly and together with market participants.

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