With 19 of the G20 countries currently piloting central bank digital currencies, this new form of money is well and truly on the horizon. But, in many places our cashless digital payments are already efficient—they are fast, frictionless and nearly seamless, in-person and for online payments. So, what possible benefits could consumers and businesses gain from CBDCs?
Martin Hargreaves, our Chief Product Officer, tackled these issues in an editorial for City A.M this week, explaining intriguing payment use cases:
“Consumers could use new smart contract functionality within CBDCs, similar to escrow, to automatically issue payment after the safe and secure delivery of goods or services. This feature would help people avoid the returns/reimbursement process and access their cash. Merchants could see payments cleared and settled faster, prevent chargebacks and gain a more accurate view of their accounts and stock.”
Martin also explored how businesses could gain new efficiencies in cross-border payments:
“In many places, cross-border payments fail. In experiments, central banks found that CBDCs could greatly simplify payments using secure blockchain architecture. These transactions could be made cheaper and quicker using fewer intermediaries and straightforward processes. Businesses could receive their funds faster, pay their suppliers earlier, and take advantage of preferential rates as they appear.”
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