Some early thoughts on the potential impact of Central Bank Digital Currencies (CBDCs)

  • micropayments, where there is either too much friction or cost that makes organising payments for a cent or lower uneconomic in today’s systems
  • cross border payments, where correspondent banking is just an awful experience and needs to be fixed asap
  • cash transactions, where an offline medium of exchange jars terribly with an increasingly digital world and a collection of consumer experiences that have been set far away from the shackles of the past that limit the innovation and progress of established (and trusted) financial services businesses
  • B2B payments (the largest flows between multinationals are cross border so fall into the correspondent banking trap also) where smart contracts, evidence, provenance and thus richer data are critical to achieve the efficiencies that have so far alluded this sector of the market – probably due to the large average transition size (and related risk profile) which means it’s still (just) economic to have people involved.

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James Sherwin-Smith

James Sherwin-Smith

Engineer by education, Consultant by experience, Entrepreneur at heart. My professional focus is #fintech, I’m an #avgeek, + I occasionally blog about #politics