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Last updated on July 15th, 2020 at 01:36 pm

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With an increase in the adverse effect of coronavirus pandemic, financial institutions all over the world are increasingly looking into emerging technologies like blockchain to mitigate economic meltdown and to achieve financial inclusion. 

In a new study, released by the Bank for International Settlements on April 14, the new report discussed crypto and blockchain-related concepts like stablecoins and central bank digital currencies (CBDC) with other topics like cloud computing etc.

The 70-page report, provides a detailed overview of emerging technologies that are most relevant to payments, describing their applications together with the benefits and risks involved. 

Central Bank Digital Currency—CBDC

The recorded growth and adoption of stablecoins prompted CBDC investigations to create a regulated digital currency for a better cross-border payments and achieving financial inclusion.

The report mentioned Distributed Ledger Technology—DLT, stressing that it “may further spur business model innovation in cross-border payments,”. It also notes that DLT can be used to streamline cross-border payments in a private environment under the regulatory guidance of the government.

The World Bank report mentioned, Facebook’s Libra, noting that such stablecoin projects has accelerated CBDC investigations in solving major problems of cross-border payments. The Bank also notes that currently, “there is no working global stablecoin project nor a CBDC project.”

Read Also: Things You Must Know About Libra Cryptocurrency. The Facebook New Cryptocurrency.

The report reads:

“Stablecoins have prompted central banks in some countries to accelerate their investigations into CBDCs and generally resulted in greater attention being paid to the challenges of financial inclusion and more efficient cross-border payments […] No global retail stablecoin initiative is currently operational.”

The World Bank’s Interest in Blockchain Technology.

This is not the first World Bank’s fintech-focused report on financial inclusion including on blockchain technology. 

In 2017, World Bank issued a comprehensive blockchain report titled “Distributed Ledger Technology and Blockchain,” stressing the need for DLT implementation for financial inclusion. 

The report suggests that DLT implementation is supported with a seamless integration into the traditional payment system. The report also explained the public blockchains of some major  cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH).

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By Tony Chimdiuto

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