Bureaucracy exists in the traditional finance system – it’s an open secret.
Unsurprisingly, the consequence of this bureaucracy is an inefficient finance sector where middlemen hold sway.
There is a glaring underperformance of the financial system. The disruption of the sector has allowed De-Fi protocols to put their feet in the door. Well, something had to wake the sleeping giant up.
The Emergence of CBDCs
Central Bank Digital Currency (CBDC) is any country’s apex bank attempt to tackle the bureaucracy in the financial system.
The CBDC will have its designated payment structure, facilitating transactions between parties while sidelining the middlemen.
Unlike the current practice in the financial system, CBDC transactions happen in real-time, with no go-between. Once it gets mainstream, transactions between parties will be much faster and cheaper.
Why The Crypto Space Needs The CBDC?
Talks centered on how cryptocurrencies can get adopted mainstream has been around for quite a while. Yet, the bitcoin cycle repeats itself, featuring harsh crypto winters and a short-lived bull phase.
If the crypto space will get that mainstream appeal, then interest shouldn’t wane after a bull run.
CBDCs can change all that. The Central Bank Digital Currencies can deliver the traction required to turn the tide. These centralized digital currencies have to be built on existing blockchain technology. What happens is that they greenlight the crypto space, bringing to an end the unfortunate FUDs that have kept cryptocurrencies in a vicious cycle.
What truly tilts the scales in favor of cryptocurrencies is the Central Banks role in all these. It’s like a stamp of approval from a higher up.
With the launch of CBDCs, regulations will come in. The bad actors in the crypto space will bow out. Sentiments regarding cryptocurrencies will be more positive, and fewer people will suffer losses.
The CBDC will put everyone on their toes, which is what the crypto ecosystem needs. Foot-dragging by stakeholders in that virtual space has caused losses that shouldn’t happen. Change is needed, and fast.
How Does Cypherium Come in?
CBDCs aren’t going to use traditional banking systems. Blockchain has been identified as the technology to be deployed. Central Banks, interested in launching their CBDC, are in search of untainted blockchains to achieve such a purpose.
With giants like Ethereum, Bitcoin, and others plagued by challenges, Cypherium has been propped up as a likely candidate. The blockchain has several attributes that fit right in the CBDC picture. Cypherium’s faster transaction processing, near-zero chance of error and its CeFi-centric infrastructure makes it most suitable for these apex bank new financial system.
Why Have CBDCs Suddenly Become Necessary?
The financial system is obsolete; blockchain exposed the chink in the current system. More people believe in a highly unregulated crypto space than the existing centralized financial system.
Central Banks have seen the writing on the wall; the ‘mene mene tekel upharsin’ is glaring. To do the needful, CBDCs will come.
CBDCs will give banks some renewed vigor, beef up the traditional finance sector, and encourage more interest from the populace. The global market will certainly be much better for it.
CBDCs will redefine the global financial system in the coming days.
The benefits of CBDCs outweigh the cons. Many will opt for these digital currencies over using the regular banking system. The near absence of risks gives CBDCs the advantage.
Cypherium hopes to be the blockchain that makes CBDCs a reality. The network has all it takes to achieve this goal. Yet, getting the chance to walk the talk is often a tall order. Hopefully, the numerous collaborations are enough to do the trick.