Steemit Engagement Challenge | S4W2 | Explanation of CBDCs by @cryptoloover".|| Burnsteem25%

Hello guys I hope you are all ok and enjoy your precious life I am here today for participate in the engagement challenge season 4 the name of this amazing challenge is CBDCs (central bank digital currency) I hope for best result so let's start;

Central Bank Digital Currency (CBDC) is a new form that exists only in digital form. Instead of printing money, central banks issue widely available digital currencies that facilitate digital transactions and transfers.

Global efforts for CBDC are growing for a variety of reasons. First, the decline has been accelerated by the rejection of paper currency as a means of contagion due to the dangers of paper currency, now that the COVID-19 crisis has shifted payment habits to digital, contactless payments and Payments have been diverted. Use of e-commerce cash.

Second, cryptocurrencies created by private organizations or informal communities such as Bitcoin have seen significant growth and value. In response, 87 countries (representing more than 90% of global GDP) are exploring central bank digital currencies, with nine of them launching fully state-owned digital currencies. .

CBDC can be produced in a number of ways. In a centralized system, transactions are recorded in a ledger maintained by a central bank, which also provides customer-facing services. In a decentralized system, the central bank sets the rules and requirements for the settlement of CBDC transactions recorded by users and/or financial intermediaries.

The impact of CBDC also depends on the implementation chosen. As we recently revealed at TechDispatch, traditional currencies require multiple intermediaries in the payment chain, resulting in a less efficient and secure payment experience. A CBDC could solve this problem, creating a more efficient, faster, more secure and autonomous form of payment processing.

In April 2019, the State Bank of Pakistan announced that it was studying the idea of issuing a digital currency by 2025. The stated purpose of issuing digital currency is to promote financial inclusion and reduce inefficiency and corruption.

In addition to launching digital currencies to encourage economic inclusion, the State Bank of Pakistan launched the National Payment System Strategy in November 2019.

State Bank of Pakistan Deputy Governor Jameel Ahmed said the central bank is currently studying the idea of issuing a digital currency by 2025 to promote financial inclusion and reduce inefficiencies and corruption. In addition, central banks will embrace an emerging reality and become fully digital and technology-enabled by 2030.In our time, technology is changing the nature of money faster than we can imagine, and it has a huge impact on our daily transactions. The world is entering the realm of digital currencies, not to be confused with cryptocurrencies The convenience of using digital currencies may soon push cash into a corner.

In this context, several central banks around the world are introducing Central Bank Digital Currencies (CBDCs) with the aim of creating stronger financial inclusion. Another immediate positive impact of digital currencies is to bring economic activity off paper and then under the tax net. Unlike cash, digital currency cannot be transacted; It can always be found.

CBDC can significantly improve people's lives, including by innovating financial services, facilitating the delivery of social benefits, reducing the cost of financial services, and providing protection for the unbanked.

Impact of CBDCs on the financial sector differ from that of stablecoins or other non-bank currencies? CBDC has no liquidity or credit risk. Therefore, it has a stable value in more countries than any other currency in the world. Conversely, confidence in non-bank currencies may decline in times of stress.

When demand for cash is low, issuing a CBDC can ensure that public funds continue to play their role in maintaining confidence in money and payments. By providing a reference standard for all forms of private money in the economy, a CBDC will protect the value of money and financial sovereignty.

Getting to know central bank digital currency professionals is critical to understanding the value they provide. Here are some key advantages of central bank digital currencies that you should consider:

• The most important positive aspect of a central bank digital currency is that it means lower transaction fees. CBDC can enable faster institutional and retail payments with lower transaction fees.

• Digital currency professionals in central banks are also primarily focused on economic development as well as digital innovation.

• A CBDC can provide a trusted digital currency jurisdiction while creating a highly attractive crypto ecosystem.

• CBDCs can provide a very cost-effective alternative to the cost of storing cash. CBDC has a low cost factor as it does not incur manufacturing, storage, transportation and disposal costs.

• By taking advantage of CBDC opportunities at an early stage, companies can gain a reputation as a pioneer.

• Customers can also take advantage of CBDC's liquidity tools during bank holidays.

• CBDC can help unbanked customers access today's digital payment instruments with little or no fees.

so these are some advantages of CBDCs.

They understand the potential of CBDC very well. Here are the main disadvantages for CBDC.

• CBDCs have significant geographic restrictions, as they are only accepted in the country where they are issued.

• Central banks can become direct competitors of payment service providers, causing banks to lose revenue.

• Additionally, CBDCs can reduce bank lending to the overall economy and economic growth.

• Crypto-based CBDCs are unrelated to traditional currencies and can exhibit high price volatility.

• The central bank's weakness in digital currencies also indicates increased competition from commercial banks.

• The nature of CBDCs as an alternative to bank deposits may encourage banks to raise deposit rates.

• Central bank digital currencies could increase system-wide bank run risk. Regardless of time and distance, such bank operations can grow rapidly during periods of financial crisis.

so these are some disadvantages of CBDCs which affects the local currency.

As we all know that, technology plays a very important role in the development and success of every country. The countries that are making good steps to improve their hands in technology are making progress day by day. So, if the CBDC are launched in our country Pakistan then this will surely improve our way towards the success and better heights.

The involvement of the digital currency will play a very important role in the improvement of financial system of our country. It would be good that these tokens are backup by the central banks so all of the public will surely feel security while using these digital tokens.

So I think that it is a very severe need of our Country to develop the CBDC system. As the whole world is adopting the digital financial systems so we also have to adopt this if you want to see our financial system on the peak.

CBDCs are efficient payment instruments for domestic and international transactions, but they can encourage households and businesses to move money out of bank deposits, increasing the cost of bank funding and reducing investment in the economy.

if we talk about our economic crises Young generation is also worried about the future central bank digital currency make you difference in future CBDC make our economic conditions better.

in this world some countries have their own CBDC and other countries try to manage their system in their banks in some countries digital currencies are used for online packages and physical purchases on stores.

Central banks around the world are introducing Central Bank Digital Currencies (CBDCs) with the aim of creating stronger financial inclusion. Another immediate positive impact of digital currencies.

It would be good that these tokens are backup by the central banks so all of the public will surely feel security while using these digital tokens.

I invite
@steemdoctor1
@afshaan
@liasteem
to participate in this contest.

Thank you