Stakeholders discuss the future of CBDCs and cryptocurrency

Stakeholders discuss the future of CBDCs and cryptocurrency 

During a virtual forum on September 28th titled "The Future of Central Bank Digital Currencies (CBDCs) and Cryptocurrency," Celo, a global mobile-first payments infrastructure company, and Forbes, a global media company, discussed progress, challenges, and what the future holds for this evolving technology. Experts from central banks and the world's leading financial institutions participated in the discussion.

With more meaningful conversations, collaborations, and partnerships with the public and official sector as a whole, the Celo ecosystem has set its sights on achieving greater success. The forum included a number of Celo executives as well as speakers from the International Monetary Fund, the Commodity Futures Trading Commission, the Central Bank of Brazil, Giesecke+Devrient, the Federal Reserve Bank of New York, the Bank of Canada, and the Bank of International Settlements (BIS) of Hong Kong, who spoke on topics such as Shaping the Future of Digital Currencies, The Role of Commercial Banks for CBDCs, and Propelling CBDCs from Idea to Reality.

According to Jim Cunha, Executive Vice President of Secure Payments and FinTech at the Federal Reserve Bank of Boston, "As countries adopt the concept of CBDCs, we should build flexible and sustainable structures that work with different countries according to the problems they are attempting to solve." When we talk about CBDCs, we must also consider the term "privacy."

Recognizing the growing demand for digital currencies

Recognizing the growing demand for digital currencies as well as the need to ensure the security of their users, Celo has also announced the launch of a new solution called Provo, a value-added sandbox for public and official sector experimentation that allows Central Banks to explore and experiment with central bank digital currencies and other types of digital assets. The Provo platform will enable financial and regulatory authorities to test CBDC designs and implementation mechanisms in permissioned and/or permissionless, risk-free environments on their platforms, which will aid Central Banks in their efforts to test, iterate, and future-proof our global financial system.

"We believe that institutions in the existing financial ecosystem should have access to the tools and resources they need to move from discussion to action and begin exploring the future of a more financially inclusive world powered by Celo," Aliu Musa, Ecosystem Lead for Celo in Nigeria, says in response to the launch of Provo. In addition to central and commercial banks, financial and regulatory authorities will benefit from Provo, which brings together the key elements required for the design, issue, and experimentation with retail currencies on the Celo blockchain."

In addition, he stated that "the Central Bank of Nigeria's (CBN) launch of the eNaira website is a step in the right direction" and that "we hope to see more Central Banks as well as other actors in the Central Banking space start testing various designs and prototypes of CBDC, whether they are account or token based."

Account-based CBDCs function similarly to digital bank accounts, with the difference being that the accounts are held by the central bank rather than a commercial bank. The value is equal to the current balance of the account, and the primary concern is identification, which will correctly link payers and payees, as well as verify that the payer has sufficient funds to complete the transaction successfully.