Name: Crypto Canvas - CBDCs & the challenges of replacing cash
Uploaded: 2024-03-14T10:29:36.233Z
Duration: 362
Description: Crypto canvas explores with Anette Broløs, Director Co-founder at Finthropology, at Finovate Europe the CBDC's and the challenges of replacing cash.

Crypto Canvas - CBDCs and the challlenges of replacing cash.mp4

Crypto Canvas - CBDCs and the challlenges of replacing cash.vtt

ENGLISH

{{00:00:16}}
I think this is a very broad question and
interesting that we focus on challenges

{{00:00:21}}
because often when we introduce new
technologies, we focus on the lack

{{00:00:25}}
of adoption and hurrying adoption.

{{00:00:28}}
But we cover a wide spectrum of different
digital pay means of payments, which means

{{00:00:35}}
that in some cultures we are already used
to working almost completely digitally.

{{00:00:40}}
And there, I expect that the change to a
digital currency would not be that great.

{{00:00:46}}
Very much is context specific and
dependent on a variety of issues.

{{00:00:53}}
And the impact will show up at
different levels, so you will have

{{00:00:56}}
likely macroeconomic changes including
how this affects your trading and

{{00:01:07}}
remittances and international transfers.

{{00:01:09}}
You will always have that.

{{00:01:11}}
Changes in the financial intermediation,
but that depends very much on why kind

{{00:01:15}}
of digital currencies will be introduced.

{{00:01:17}}
And then of course there's the
question of adoption, where I think

{{00:01:21}}
that one of the fears of them that
People might not want to adopt digital

{{00:01:25}}
currencies, that they would be afraid
of losing anonymity, or that it would

{{00:01:29}}
be difficult for vulnerable groups to
actually access this type of currencies.

{{00:01:35}}
But I think that if you think it's you
will find that the challenges in the last

{{00:01:39}}
group are perhaps lesser than you expect.

{{00:01:50}}
I think two things about regulation.

{{00:01:53}}
One thing that is that
it's very difficult to do.

{{00:01:57}}
forward thinking in regulation, because
you need to understand how the world is

{{00:02:01}}
changing before you know exactly what
kind of regulation will actually work.

{{00:02:06}}
So a close dialogue will be
necessary in changing this.

{{00:02:12}}
The other thing is that this very much
depends on what kind of aims you have

{{00:02:17}}
for the introduction of digital currency.

{{00:02:23}}
This is perhaps less covered and I
think we might come back to that,

{{00:02:27}}
but there might be different ways of
introducing digital currencies and

{{00:02:31}}
that will entice different regulation.

{{00:02:42}}
I think that when we look at the
introduction of digital currencies,

{{00:02:45}}
the most important thing to remember
is To consider the aim that you

{{00:02:51}}
have for the introduction, what
it is that you, as a country, as

{{00:02:55}}
a government, you want to achieve.

{{00:02:57}}
And the second thing is, that there's
probably no specific one way of doing

{{00:03:04}}
it, no one right way of doing it.

{{00:03:06}}
So you'll likely be, be
embarking on a journey.

{{00:03:12}}
But when, As Finchipology, we had the
fantastic opportunity of being part

{{00:03:16}}
of an analysis conducted by MIT and
made in lab on financial inclusion.

{{00:03:22}}
But they came up with a fairly
important set of general things to

{{00:03:25}}
consider, which is your custody, your
data access, your connectivity, your

{{00:03:31}}
geographical distance, and the finality
and the kind of payments that you have.

{{00:03:37}}
That is, can you reverse
a payment or can you not?

{{00:03:40}}
So there are many decisions to
be made and many things to be

{{00:03:43}}
considered when you introduce a CVDC.

{{00:03:56}}
So like I say, there's
no one right answer here.

{{00:04:00}}
I think the most important thing
to consider at a societal level is

{{00:04:03}}
what is it that you want to achieve?

{{00:04:05}}
Do you want just to
replace cash with digital?

{{00:04:09}}
Or do you want to achieve
better financial inclusion?

{{00:04:12}}
Or do you want intermediation system?

{{00:04:15}}
And that will be the
determination of what.

{{00:04:21}}
affect you actually a to?

{{00:04:31}}
So I like that you mentioned
trust and non trust.

{{00:04:35}}
I think there are two things to say.

{{00:04:37}}
One, it's very diverse.

{{00:04:39}}
So you may trust your traditional bank for
compliance, but not for the best offer.

{{00:04:45}}
And you may trust your government, but not
with central bank or your tax authority.

{{00:04:51}}
And also that trust cannot
be introduced by regulation.

{{00:04:56}}
It needs to be earned.

{{00:04:58}}
So that's, there's only one way on trust.

{{00:05:00}}
And that means also that it's very
important to consider the the community

{{00:05:05}}
that you're in, the country the the
culture, the money culture, how people

{{00:05:11}}
are used to managing and how this new
offer has been actually help them.

{{00:05:16}}
We saw on the adoption side, for instance,
a very rapid in the adoption of the

{{00:05:21}}
Brazilian instant payment solution
called PIX, which is not a traditional

{{00:05:26}}
currency but, however, was really quickly
adopted by almost everybody as it's easy

{{00:05:32}}
to use, supported by most traditional
financial institutions and cheap.

{{00:05:38}}
Then, of course, literacy, financial
education, and connectivity are important

{{00:05:43}}
as well, but I think that the first
thing to ensure is that you actually

{{00:05:48}}
solve, a problem for the customer,
then adoption is usually quite easy.

I think this is a very broad question and
interesting that we focus on challenges

because often when we introduce new
technologies, we focus on the lack

But we cover a wide spectrum of different
digital pay means of payments, which means

that in some cultures we are already used
to working almost completely digitally.

And there, I expect that the change to a
digital currency would not be that great.

Very much is context specific and
dependent on a variety of issues.

And the impact will show up at
different levels, so you will have

likely macroeconomic changes including
how this affects your trading and

Changes in the financial intermediation,
but that depends very much on why kind

of digital currencies will be introduced.

And then of course there's the
question of adoption, where I think

that one of the fears of them that
People might not want to adopt digital

currencies, that they would be afraid
of losing anonymity, or that it would

be difficult for vulnerable groups to
actually access this type of currencies.

But I think that if you think it's you
will find that the challenges in the last

group are perhaps lesser than you expect.

One thing that is that
it's very difficult to do.

forward thinking in regulation, because
you need to understand how the world is

changing before you know exactly what
kind of regulation will actually work.

So a close dialogue will be
necessary in changing this.

The other thing is that this very much
depends on what kind of aims you have

for the introduction of digital currency.

This is perhaps less covered and I
think we might come back to that,

but there might be different ways of
introducing digital currencies and

I think that when we look at the
introduction of digital currencies,

the most important thing to remember
is To consider the aim that you

have for the introduction, what
it is that you, as a country, as

And the second thing is, that there's
probably no specific one way of doing

So you'll likely be, be
embarking on a journey.

But when, As Finchipology, we had the
fantastic opportunity of being part

of an analysis conducted by MIT and
made in lab on financial inclusion.

But they came up with a fairly
important set of general things to

consider, which is your custody, your
data access, your connectivity, your

geographical distance, and the finality
and the kind of payments that you have.

That is, can you reverse
a payment or can you not?

So there are many decisions to
be made and many things to be

So like I say, there's
no one right answer here.

I think the most important thing
to consider at a societal level is

Do you want just to
replace cash with digital?

Or do you want to achieve
better financial inclusion?

And that will be the
determination of what.

So I like that you mentioned
trust and non trust.

So you may trust your traditional bank for
compliance, but not for the best offer.

And you may trust your government, but not
with central bank or your tax authority.

And also that trust cannot
be introduced by regulation.

So that's, there's only one way on trust.

And that means also that it's very
important to consider the the community

that you're in, the country the the
culture, the money culture, how people

are used to managing and how this new
offer has been actually help them.

We saw on the adoption side, for instance,
a very rapid in the adoption of the

Brazilian instant payment solution
called PIX, which is not a traditional

currency but, however, was really quickly
adopted by almost everybody as it's easy

to use, supported by most traditional
financial institutions and cheap.

Then, of course, literacy, financial
education, and connectivity are important

as well, but I think that the first
thing to ensure is that you actually

solve, a problem for the customer,
then adoption is usually quite easy.

FinovateEurope

Finovate

Crypto Canvas

Expert Insight

Crypto canvas explores with Anette Broløs, Director Co-founder at Finthropology, at Finovate Europe the CBDC's and the challenges of replacing cash.

CBDCs

Blockchain Crypto

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Dr Anette Broløs

Discover insights from other experts

Director Co-founder

What are the primary challenges associated with the widespread adoption of digital currencies as a replacement for traditional cash in everyday transactions?  

How do you foresee regulatory hurdles impacting the transition from cash to digital currencies, especially considering concerns around anonymity, security, and financial stability?  

In the context of central bank digital currencies (CBDCs), what technical challenges need to be addressed to ensure scalability, interoperability, and security in comparison to traditional cash systems?  

How do you assess the potential societal impacts of phasing out physical cash in favour of CBDCs or cryptocurrencies, particularly concerning financial inclusion, privacy, and control over personal finances?  

What strategies can be employed to address the challenge of user adoption and trust in transitioning from cash to digital currencies, especially considering factors like technological literacy, accessibility, and cultural norms?  