I used to think CBDCs were pointless since people with banks and fintech accounts seem fine without them. But today, I stumbled upon the idea of financial inclusion and realized there are still so many folks out there without a bank account. Apparently, over 1.3 billion adults globally lack one.
Still not fully convinced, though. I mean, if someone doesn’t even have a phone, why would they care about CBDCs? They can’t use it without the right tech. Plus, I bet there are tons of reasons among that 1.3 billion why people don’t have a bank account. If someone can't even open a regular bank account, would they really go for a CBDC? Just something I'm pondering.
Check out the article that got me thinking about this: https://cointelegraph.com/opinion/governments-cbdcs-financial-inclusion
Read it and share your views here. Maybe I’ll pick up something new in this discussion.
If you ask many people why the bitcoin adoption rate is actually not growing in the rural areas you will usually hear that its because of the people there who do not have access to phones or network to actually use it, if this can affect bitcoin then it will definitely be a big problem too to CBDC because its digital.
I have always said that to a common man CBDC is actually dead on arrival because one thing common does with his bank is to save money, if they wishes to actually use fiat for currency they use the paper money which has a history of been hoarded. If the government can have problem with citizens when they wanted to run cashless policy with citizens not comfortable with online transfers for payment then CBDC will definitely not make sense to them
CBDC does not create financial inclusion. If it somehow becomes a success, it is still people that re digital and already have bank accounts that will use it. If the government want to increase the rate of financial inclusion, they have to create better financial systems and educate people on the importance of being digital. Currently, about 2.6 billion people in the world don't use the internet. In Africa, there are more people who don't use the internet than people who do. CBDC is not the answer to this problem. The answer to this problem is better economies, better societies and government systems.
When there is so much poverty in a place, why would the people there care about bank accounts when every penny they make is just to take care of the next meal?
Most of the people who don't have a bank account or who are not digital didn't do it by choice. The situation they are in forced them to be that way. So creating a different system like CBDC won't solve shit.
you said it yourself. there are other reasons for why they dont have a bank. i know people who dont have banks because they never had to create one because they are not traditionally employed. some are unable to meet the criteria for what the bank asks. its not just about phones and accessibility. i even think that more people have phones than banks.
If someone can't use a bank account, they won't be able to use a CBDC either. In fact, this new form of money does not solve people's problems. This form of money is for total control over your money. First of all, this will lead to the cancellation of cash. Cancellation of cash = cancellation of money altogether. Because CBDC are actually personalized coupons for goods, services, etc., that is, it is deprived of one of the main functions of a universal medium of exchange - interchangeability. A CBDC can be blocked and a person will starve to death. Actually, when there is universal chipping, then they will try to introduce CBDC. To make it work regardless of whether a person has a smartphone.
It's always funny when CBDC is hailed to be able to bank the unbanked? those 1.3 billion people, whats stopping them from creating a bank account knowing it has been less hassle than ever? I think most likely it's because they don't really trust bank.
Creating a centralized currency, possibly managed by bank like CBDC isn't financial inclusion for them, it will just be another centralized product. For the real financial inclusion, the solution is already here called bitcoin. smh.
I think my country should be an experiment for other countries. CBDCS called eNaira was created I think in 2021, it has Android app and maybe also available in iOS but it has been long and I could not remember but I think so. The CBN went to market and some other places to let people know about it but at the end, people did not use eNaira and it died just like that.
United States are not planning CBDC anymore or they keep postponing it because they see no good use that it has that digit fiat does not have. It is a waste of money on a useless project.
imo, I think a bank account is literally the closest financial thing that anyone can own even if it also has it's own limits in certain typical rural areas. I think the idea of CBDC is gradually failing. Yeah, it ought to improve financial inclusion, but I guess a lot of people just couldn't evolve and get used to it. This is one tricky thing about innovation... Just because it offers something similar to what people already know, doesn't guarantee it success in a long run. So, to the question, I think a large percentage of those who fail to own an account, can't go for CBDC because bank is literally the least among all.
CBDC might even weaken banks
You dont need a bank account to use CBDC.
I dont think developed countries will adopt CBDC soon, specially because they weaken banks and this isnt going to make any good to those societies imo.
However, it is likely that in emerging countries we will see many countries adopting cbdc, specially the ones with an authoritarian regime.
The high population of unbanked people is mainly caused by poverty, illiteracy and poor infrastructure. Most people don't have any need for banks because they don't earn enough to save. Some of them cannot afford phones to carry out online banking transactions. Some developing countries lack access to basic infrastructure like electricity and Internet connection. While others avoid banks because they cannot read or write.
However, if the government can devise an offline transaction for CBDCs, it might reduce the number of unbanked population in developing countries.
One thing I read from the link shared is as part of the reason why some people don't own bank accounts is because they don't want to spend fees in terms of carrying out transactions; they prefer to be paid in cash, and one other reason is some don't want to get tracked, which CBDC will also have almost similar features to what most are avoiding.
No matter how you promote it to them, they will just prefer not to use it at all unless it's mandatory; some people are used to cash transactions, and it makes it difficult for institutions to track their transaction records, and they are cool with that.
CBDC was launched in my country, Nigeria; but it is already a dead project. Maybe a handful of people used it when it was launched, but nobody uses it now. CBDC is useless, and it serves no purpose that the already existing system doesn't fulfill. It was a welcome development when Donald Trump banned the issuance of CBDC's in the United States and i am sure that contributed to a dwindling interest in CBDC's from many other countries and indeed it should stay that way.
It is not possible for somebody that does not have a phone to have CBDC, this is because the currency is technology based, so it's not possible somebody that doesn't have a phone that is connected to the internet to successfully operate and have an account that has CBDC as a currency. One of the major reasons that I know about people that don't have account is basically because of the fact that they are either in a remote community where there is no access to banking services, or they probably render services that don't need the activity of a bank so that way having a bank account literally means nothing to them because they probably deal on cash.
I scanned through the article and I figured it was only a CDBC pr. Utilising it defeats freedom, privacy and at the same time, and encourages control, as you said, it will never solve shit. The surveillance system the government are trying to impose on people needs stuffs like CBDC to flourish so as to control their finances. It's screams a huge red flag and No!
If financial inclusion is being outlined heavily here, is it right to assume that government basically implies the CBDC will be kyc less and accessible even by people who aren't in the banking system?
That's interesting because if that is the case, they are trying to create a digital fiat that is less controlled unlike bank, but instead a digital version of cash and with some of its benefit which means a better stablecoin issued by the very own government that issued the fiat. Interesting.
This.
In Europe nobody wants the CBDC, at least in its retail form, as it would displace the banks.
Not the retail that would see this as an Orwellian instrument from the government.
Not the banks, that would seeetheir deposits tdrained.
Not even sure what the ECB is trying to accomplish with that.
But isn't there a chance that the CBDC architecture requires banks to be involved and restrict or prohibit anyone else from developing online banking accounts / wallets? That is what least what I suspected, involve the banks like it is today and the users have to download an app that is per se connecting banks with each other.
If it ever comes, it will not be to improve user experience and privacy. I think it is mainly to have maximum surveillance possibilities and options like freezing accounts entirely even when there is only suspicion of any crime like tax evasion. Or bank accounts could be frozen from people they can't stand.
Nonetheless, bitcoin itself takes away options to some degree like freezing accounts as people could just use a decentralized currency. WOuldn't CBDC be most effective from the perspective of the government if it goes hand in hand with cash abolition?
The CBDC is a nice development at it own specification based on the fact that you manage, control and spend your funds online which should be very quiet and convenience method as financial inclusion. I also expects the technology to trends due to the elimination of stress like the need of going to the bank for cash or physical transactions.
The CBDC has also been demanding users to pass through KYCs which expects every users should have a personal device for the accessibility of your account at your comforts.
It also requires someone conversant with the modern technologies.
While it may have it pros and cons, it remains risky against internet fraudsters.
Yes, such a person can definitely go for CBDC because creating bank accounts is hard for many people and they don't want to visit banks to get their accounts because it takes time to create a bank account and the process is hard for a good number of people.
Who wants to visit a bank 2-4 times in order to have an account, but at the same times who don't want to have CBDCs that work as fiat money but are digital in nature?
Almost everyone who's an internet user will shift to CBDCs and there will be huge market of such CBDCs and each country with a CBDC will be get status of a developed country in my opinion.
The concept of fiat money has everything to do with the banks. Its one concept that the cryptocurrency industry looks to refine in this century but, thats not being a very acceptable fact by the generation before and even with that, the CBDCs is something that would be definitely a do without for most individuals since, its just another digital fiat that uses wallets.
May individuals who tries to avoid banks today tend to do so with the very concept of not having a digital history in their financial activities as is the case with banks, the one way to do that is cryptocurrency which means, you would find people of knowledge being more inclined towards cryptocurrency than the CBDCs and thats how the concept about it might be of little or no impact.