Can Central Bank Digital Currencies Be Used to Fight Financial Crimes?
Cointelegraph By Marcello Minenna's original article for cointelegraph.com reduced by 42%
Paper money today is a marginal part of the currency in circulation and represents a direct relationship between the end user and the central bank. Central banks could start the process of digitizing paper money and thus create their own digital currency. De facto, cash represents a direct and untraceable relationship between the end user and the central bank.
Back in September 2017, Chinese monetary authorities banned operations concerning crypto assets in order to control capital flight, when the People's Bank of China forbid financial transfers from the banking system to cryptocurrency exchanges. We need to take the first step on that 10% of "Crypto" cash in circulation and gradually transform part of it into a transparent digital currency backed by the government or the central bank. Citizens in the eurozone could use a digital wallet with digital euros that can be managed via a smartphone, all without the need to open a bank account.
A central bank could also offer its digital currency to other currency areas through foreign reserves and/or with liquidity swaps: For example, the European Central Bank could offer digital dollars as the U.S. Federal Reserve could offer digital euros.
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