In accordance with a report shared by the Bank of America, the adoption and rise of CBDC, the Central Bank Digital Currencies is inevitable. The bank believes that the central banks that fail to introduce their own CBDC would witness a decline in the demand for their currencies.
Due to the increasing utilization of blockchain technology, CBDCs will be possessing the potential to replace cash entirely in the future.
Most recently, the Bank of America shared a research paper that said that the CBDCs could boost the economy, which is why the central banks that fail to introduce a CBDC may be left behind.
In addition to this, the bank banished the rumors surrounding the similarity between CBDC and cryptocurrencies as CBDCs can be utilized as a means of exchange and store of value, but on the other hand, cryptocurrencies do meet this criterion for now.
Moreover, the bank clarified that the introduction of CBDCs will eliminate the need for stablecoins as the central bank digital currencies could present a material financial stability risk during times when the market will witness pressure and crypto to fiat currency rush would be there.
As reported earlier this month, the Bank of America created a team that was focused on researching cryptocurrencies in accordance with a memo witnessed by Bloomberg.
Around 80% of central banks are exploring the use cases that involve CBDCs, with around 40% already testing the proof of concept programs.
Also, it has been reported that the bank has approved the trading of Bitcoin futures for some clients and the sources that are aware of the matter say that the prime brokerage of the bank has begun the clearing and settlement of the crypto ETPs for hedge funds in Europe.