UNDERSTANDING DEFI: A GUIDE FOR CREDIT UNION MEMBERS CONT. However, Caution is Advised: Users should be aware of potential smart contract failures, liquidity issues, and regulatory uncertainties. As the digital realm permeates every aspect of society, even national currencies are not immune. Enter CBDCs, the digital version of national currencies, supervised by central banks.
Defining CBDC: It’s a state-sanctioned digital currency, retaining the characteristics of traditional money, but in a digital form. Why the Momentum Towards CBDCs? From enhancing financial inclusivity to refining transactional efficiency, CBDCs have a lot to offer. Additionally, they promise improved security and can be a potent tool for economic policy implementations.
Varieties of CBDCs: Retail CBDCs: Intended for the general populace, mirroring physical cash. Wholesale CBDCs: Designed for interbank processes.
Recognizing the Merits: Beyond the cost-effective and traceable nature of transactions, CBDCs also bolster security and financial stability.
ISSUE 3 | DECENTRALIZED FINANCE & CENTRAL BANK DIGITAL CURRENCIES
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