5 ways CBDCs could impact the global financial system

cointelegraph.com:

Central bank digital currencies (CBDCs) are digital versions of fiat currencies that are backed and issued by central banks. Here are five ways in which CBDCs could impact the global financial system.

CBDCs might make payments quicker and more efficient because they would do away with the need for intermediaries. Costs could be brought down as a result, along with financial inclusion and an improved global payments system.

CBDCs could also enable cross-border payments to become faster and more efficient, as they would not be subject to the limitations of the traditional financial system. The ease and reduced cost of conducting cross-border commercial transactions could have a big impact on global trade. Additionally, because they would be supported by the central bank and subject to strict security controls, CBDCs could aid in lowering the risks connected with payment systems, such as fraud and cyberattacks.

The use of cash may drop with the introduction of CBDCs as more individuals switch to making digital payments. This might make it simpler for central banks to monitor cash movements and thwart fraud and other criminal activity.

There may be less need for ATMs to disburse cash as more consumers switch to digital payments. This can result in fewer ATMs being used and less money being spent on servicing them. Moreover, CBDCs could enable peer-to-peer payments between people and companies, doing away with the requirement for in-person cash transactions. Without requiring actual cash, this would make it simpler for people to give and receive money.

By giving central banks more direct control over the money supply and interest rates, CBDCs may enhance financial stability. Although CBDCs could offer an alternative to