Official crypto poses a threat to banks: Moody's


According to the rating agency, the introduction of an official digital currency could have a number of positive effects on consumers and the financial system.

Depending on its design, an official digital currency could enhance the Bank of England's "current tools for implementing monetary policy and ensuring financial, monetary and macroeconomic stability," Moody's said.

It has also been suggested that developments in the UK, where payments are increasingly digital, "would make payment landscapes more resilient".

It is predicted that only 9% of payments will be in cash by 2028, the report said.

For consumers, a currency issued by the central bank would "also provide safer and more trustworthy payment services" compared to other forms of crypto like Bitcoin.

At the same time, the introduction of an official digital currency would likely have a number of negative effects on traditional banks.

This would increase the risk of disintermediation, likely increase funding costs, decrease fee income, net interest margins and profitability, Moody's said.

"Customers would probably prefer the security of the risk-free CBDC and prefer them to cash in the checking accounts of the commercial banks," it said. "Replacing bank deposits for a CBDC carries the risk of tightening bank funding and then increasing borrowing costs and the risk of disintermediation for banks."

One of the central bank's challenges in adopting a digital currency would be "to ensure that funding of the economy remains in place, as banks play an important role in using their deposit base".

Regardless of the likely negative impact on traditional banks, the introduction of a digital currency "would also support the status of the UK financial sector as a global, innovative and competitive financial center," the report said.

"The UK was an early adopter of open banking and fintechs have a strong presence there," it said. "As a result, a CBDC could provide additional insights into customer behavior and enable banks, other financial intermediaries and fintechs to develop new products that expand customer choice and reduce transaction costs."

https://dailyaffiliatemarketingnews.com/official-crypto-poses-a-threat-to-banks-moodys/

Comments

Post a Comment

Popular posts from this blog

Chia Coin Crypto Mining: Try Chia with 16 TB Sabrent SSDs

Image
introduction I avoided writing about cryptocurrency mining articles, but I had to check out Chia cryptocurrency mining when it hit my radar a few months ago. After really immersing myself in Ethereum mining a few years ago and still paying the electricity bill many years later, mining with my SSD sounded like fun. VIEW GALLERY - 17 PICTURES Sabrent got in touch and pretty much packed 4 x 4 TB Rocket NVMe PCIe 3.0 M.2 SSDs and an ASUS Hyper M.2 X16 Card V2 that supports the 4 x NVMe M.2 SSDs. In total, I have 16TB of super-fast PCIe 3.0-based NVMe SSD storage to play around with - it feels so utterly overwhelming to have 16TB of flash storage in my computer, but I love it. It continues with its use for the best cause - for mining chia crypto coins. At first I was so very hesitant, I wanted to do an article for Sabrent, but then using the SSDs for chia coin mining feels like hardware abuse. It's different than having your GPU working 24/7 for crypto mining because you can do i...
Read more

Would you like to leave corporate content marketing for a startup? Here's what I would have known

After more than five years in the corporate environment, you are hungry for change. Marketing trends seem like tectonic plates shifting beneath you, but you stand still right where you were a few years ago. Professionally, you feel the need to join a startup - because of its speed and ambitious OKRs, its culture lessons, its need for experimentation, its actual customer and user obsession, its everyday mentality. In your opinion, your career depends on these experiences. You have the feeling that your career could stall otherwise. But there are a few things you should know before joining. Feel the turbulence in your bone bon In your past jobs at market giants, most of the days and weeks felt the same. Aside from a historic deal that was won or lost, a tough week or month has a similar emotional tenor as a good week or month. At the start, your experience will mimic the dynamics of a concert: euphoric highs mixed with some heartbreaking lows. Most days, however, will be exciting. ...
Read more