Cuy Sheffield, the head of Crypto at Visa, says that central bank digital currencies (CBDC) could potentially prove to be one of most important developments in the coming decade.
Sheffield, who previously worked in business development at TrialPay, is now responsible for overseeing Visa’s crypto-related initiatives.
He noted via Twitter:
“As governments evaluate CBDC, the path they decide to take will have major implications for privacy, monetary sovereignty, geopolitics, and financial inclusion, as well as global adoption of crypto dollars and Bitcoin.”
“I’d argue that central bank digital currency is one of the most important trends for the future of money and payments over the next decade. Regardless of anyone’s personal views of whether it’s good or bad, the reality is that global interest in it is not going away.”
He further noted:
“What used to be an occasional paper from an analyst at a central bank every few months has evolved into a steady stream of content from many different experts, academics, and organizations making it harder to keep up with the latest considerations”
In May 2020, Sheffield had claimed that reserve banks weren’t too interested in consumer-facing virtual currencies. Earlier this year, Visa filed a digital currency patent application.
Central banks throughout the world have been exploring the potential benefits of developing and issuing a CBDC.
The Bank of Japan has confirmed that it will be testing out the feasibility of issuing a virtual yen, in order to determine whether the digital token can improve the nation’s existing financial system.
China has been working on its own CBDC for well over 5 years. The nation’s government recently revealed that it had completed the top-level and back-end design of the virtual yuan, however, no official launch date for the CBDC has been announced.
Last month, the Bank of Canada confirmed that it was testing out various CBDC solutions. The bank had also noted that financial privacy enhancing zero knowledge proofs (ZKPs) were not ready for integration with CBDCs.
Sweden’s Riksbank has said that consumers might shift their financial holdings to stablecoin denominated assets if the existing payments systems aren’t improved.
CBDCs could enable more efficient cross-border payments and potentially improve resource distribution, like with stimulus cheques, according to a June 2020 report.
Last month, the South Korean reserve bank appointed a legal team to explore the feasibility of issuing a digital currency.