Central Banks Weigh CBDCs Against Instant Payment Systems as mBridge Faces Growing Concerns Over Its BRICS Associations
The post Central Banks Weigh CBDCs Against Instant Payment Systems as mBridge Faces Growing Concerns Over Its BRICS Associations appeared on BitcoinEthereumNews.com.
The waning interest in Central Bank Digital Currencies (CBDCs) for cross-border payments has raised eyebrows within the financial community. Recent statistics reveal a significant decrease in the favorability of CBDCs, reflecting a shift in central banks’ strategies. According to the OMFIF report, “Instant Payment Systems are preferred due to their scalability and established frameworks,” underscoring a major transition in payment modalities. This article analyzes the declining interest in CBDCs for cross-border payments and the rise of Instant Payment Systems in 2024. Declining Popularity of CBDCs The enthusiasm surrounding Central Bank Digital Currencies (CBDCs) has diminished significantly, as evidenced by findings from the OMFIF Future of Payments 2024 survey. Only 13% of central banks view CBDCs as the most promising method for enhancing cross-border payments, a dramatic decline from the 31% reported last year. This trend indicates a growing skepticism regarding the long-term viability and effectiveness of CBDCs in facilitating international transactions. Challenges Facing CBDC Implementation While CBDCs promise transactional efficiency, the challenges surrounding their implementation cannot be overlooked. The report highlights high operational costs as a primary concern for central banks. The varied perspectives on the best approach to address these challenges demonstrate the complexity of adopting a unified CBDC framework. As one respondent articulated, there is a “remarkable diversity of views” on the best method for achieving cross-border payment solutions. Project mBridge’s Struggles Project mBridge, positioned as the leading multi-currency CBDC platform, has faced several hurdles that hinder its broader adoption. Since achieving the minimum viable product phase in June 2024, liquidity and governance issues have emerged as critical barriers. As stated by a project participant, “mBridge offers a completely new architecture on how to transmit across borders, one that is faster and cheaper,” yet its reliance on technology developed in China raises alarms regarding decentralization and control. Regulatory…
Filed under: News - @ December 1, 2024 7:11 am