Will The CBDC Journey Lead Us To A Cashless Society

It is interesting to view the global story of CBDC (Central Bank Digital Currency) before and during the coronavirus pandemic. In the pre-pandemic days, there was one lone nation that seriously got into the CBDC act and that was China. While the rest of the world did start understanding and debating CBDC, most governments did not place it on their list of priorities. 

The concept of online and other contactless modes of payments, gained momentum during the pandemic. At the same time, governments faced challenges brought about by conventional currency. Businesses closed and citizens remained locked down in their homes. Citizens had a desperate need for financial assistance, governments responded by announcing significant aid distribution programs. 

Generating the money to fund various stimulus packages was a massive task, but efficiently distributing the money to people spread across the nation also raised several challenges. Need was felt for a digital currency that could instantly move from one point to the other – instantly accessible and usable by the receiver. The answer was cryptocurrency but, the idea of it being totally uncontrollable and completely privatized raised a few legitimate concerns. 

Governments have since got busy evaluating CBDC options.  A concept that could deliver a number of benefits attributed to cryptocurrency, while still being governed by the apex bank of the nation. Many CBDC plans across the globe, are in various stages of being launched, tested and implemented. CBDC also has the capability to drastically cut costs related to the printing, storing, moving and securing of conventional paper money. Not to talk about the, massive resources involved in maintaining the physical presence of banks and their numerous branch offices. 

Increased usage of CBDC would reduce the volume of conventional currency handled but, could we be heading towards a cashless society? Answering this question will involve more than an understanding of how digital currency works. On the international scene a wide application of CBDC, could disrupt the existing importance of various currencies that dominate the global financial landscape. Nations would also need to implement necessary infrastructure and make sure that, even the common man understands the concept of digital currency. Let’s not forget that, irrespective of the level of development attained by a nation, there would always be a group of people that do not have access to new technological developments. 

It would be fair to say that, the implementation of CBDC and its objectives would evolve in the next few years. The focus today and in the near future, might not be to totally eliminate conventional currency. An important point would be to observe, how well the people as a whole respond to and participate in the usage of CBDC. Severe enforcement measures by the government on issues related to CBDC usage, might have a negative impact. 

 

GLITZKOIN: A quick recap of the Glitzkoin project and the GTN crypto token.  The project was launched to improve the demand for natural diamonds and to enhance, the efficiency and productivity of the multibillion dollar industry. 

The DiaEx diamond trading platform was developed using Stellar blockchain resources. The GTN token was launched as part of the project and is designated, as the mode of payment on DiaEx. Promoted by second generation diamond veteran Navneet Goenka, Glitzkoin assigned a multifaceted role to the GTN token.  

The trading platform was completed in 2019 and was put through rigorous testing in early 2020. A team of diamond dealers subsequently did a pilot run on DiaEx with, actual transactions made on the platform.  This process was largely successful and revealed a few areas for improvement. The Glitzkoin tech team was handling the minor adjustment when, the pandemic and subsequent lockdowns slowed down the process. The management will reschedule the full launch of DiaEx once the health crisis eases. 

Talking about the multifaceted nature of the GTN token, the project is also focused on further increasing usage for the crypto – this aside from crypto exchange trade and the payment usage on the DiaEx platform. The concept is to have operators of various businesses, accept the GTN token as a mode of payment in their operations. Moving this idea forward Glitzkoin has confirmed a partnership with online ticketing giant Myticket.asia, wherein clients of the ticketing portal could use the GTN token as a mode of payment. Technical requirements for the integration of systems on both sides is at an advanced stage, nearing completion. Reviewing the challenges that the entertainment industry has been going through during the COVID pandemic, both managements have decided to set a launch schedule when the situation starts to normalize. The arrangement setup between Glitzkoin and Myticket.asia will form the blueprint, for similar deals to be negotiated with other business operators.  

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