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Hi everyone,
I welcome you all, specially to this week's engagement challenge. The season 4 engagement has moved to its second week which is a clear indication that we are making progress.
I welcome you all, specially to this week's engagement challenge. The season 4 engagement has moved to its second week which is a clear indication that we are making progress.
There is no iota of doubt in the minds of steemians regarding the efficiency of this amazing project because of the impact it has added to the platform. On this day, I will be presenting my participation in the contest organised by this wonderful community on the topic of the Explanation of CBDCs.
What is your understanding about CBDC (Central Bank Digital Currency)?
The term Central Bank Digital Currency which is abbreviated as CBDC is talking about a digital token which can be likened to the cryptocurrency we all know today, the only difference is that CBDC tokens are pegged to the country's currency or fiat. This means that the CBDC of every country is pegged to their native or traditional currency.
CBDC tokens are gradually gaining ground most especially in developed countries because of the advancement in technology. Since the coming of blockchain technology, we have seen tremendous changes in the economy of the world and most countries have taken advantage of this technology to raise and stand out among their equals.
In summary, we can see CBDC as a digital currency that is issued and controlled by the central bank of every nation. It doesn't have the volatility of the normal cryptocurrency because it is pegged with the country's native fiat. The CBDC token then serves as a token which can be exchanged between countries and retain their fiat value or the value of the fiat in the country.
Is your country has its own CBDC? If not, share your opinion about its presence in your country.
Yes, my country has its own CBDC and it is called the e-Naira. Before I forget, Nigeria's currency is in Naira and I believe that is the very reason why they named the CBDC token as e-Naira. This e-Naira is pegged to the value of the country's fiat which is the Naira.
It is quite unfortunate that as it stands, the e-Naira is not completely functional due to low exposure to technology here in the country. The country is still developing and they are careful when it comes to adopting new technology. I believe you may have heard that the country places a bond on cryptocurrency which makes many investors and exchange platforms stop trading with Nigerians.
Importance of CBDC in the financial system.
The importance of CBDC in the financial system of any country can not be overemphasised. Once a country adopts CBDC, its economy grows exponentially because people within or outside the country can invest knowing fully well that the prices of everything are the same as the normal fiat and that they can safely store their token in their wallet without any fear of the token losing its value.
Another importance of the CBDC is that it will go a long way in controlling the inflation rate in the country and provide stability in the country's finances. Traders a d businessmen can perform transactions within a split second and that will help boost the finance as well.
What do you think if it is the need of your country or not?
Every developed country needs a CBDC token to enhance its transactions. With that being said, I don't think at this point Nigeria needs it because the country is still developing and if such currency is put into use a lot of investment may crash because of a lack of the knowledge and facilities to perform the transactions.
I have said earlier that the country once banned cryptocurrency, which is to show you how low they are when it comes to new technology. Adoption of the CBDC will come but I guess at the right time when we are more educated and exposed to what this technology is all about.
More also, the adoption of CBDC in Nigeria may cripple the economy because at the moment the Nigeria Naira doesn't have any significant value but if the value of the Naira will appreciate when people can purchase the Naira same way they purchase the US dollars, then we can say Nigeria needs the CBDC for easy and faster transactions.
Advantages and Disadvantages of CBDCs.
The advantages of CBDCs are listed below
One of the major advantages of CBDC is that the user's assets will be more secure in his or her wallet than in the bank because any unforeseen circumstance can happen with the bank
The congestion at the bank will be reduced to the nearest minimum. Since transactions of any kind can be via the digital token.
CBDC will make money more reachable to all. I.e there will be volume to the fiat of that country and everyone can easily have more access to it as well.
Transactions can be carried out between nations since they can now use the digital asset of the nation to carry out their buying and selling of assets, this will remove or reduce the charges involved.
The disadvantages of CBDCs are listed below
Since CBDC is a token pegged with the national currency, the control of how the currency moves and is distributed will still be with the central bank of the country (centralized power)
The privacy of the user will not be completely protected because before making use of the CBDC, a verification capturing your data will be taken into consideration and which makes it easy to trace you anytime any form of transaction is carried out.
The absence of physical cash can crumble some businesses because a lot of people are illiterate and they don't believe in any money they can not see or touch.
Is it a global need? Give your opinion on it.
Yes, CBDC is a global need. The truth is that if all the nations in the world will adopt it, transactions between countries will become easier. You only need to pay the amount for those goods using the country CBDC and that can go a long way in making the transaction easier and even faster.
In my opinion, if CBDC is adopted globally, it will foster relationships between nations and performing transactions will be easier and even faster. We will see cross-border transactions between nations where the value of any country's digital asset is maintained just like the case of cryptocurrency today which has its value accepted by all at any point in time.
CBDC talks about a digital token in any nation where the price is pegged to the price of the country's fiat. It goes a long way in fostering the transaction of goods and services without having to go to the bank for any cash withdrawal. Keeping your assets in your wallet makes it more secure than in conventional banks which may be prone to fire outbreaks, theft etc. I want to invite a few friends to join this contest as well, @goodbest, @yakspeace and @preye2.
This post basically gave me more insights on what CBDC is all about, as it refers to the digital currency attached to a country's traditional currency.
I love and agree with your response here, because digital transactions tend to be more realiable and faster, which gives it an edge over the traditional method. I will surely place my entry in this contest too.
Thanks for sharing such an educative content my friend, and goodluck in this contest.
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Congratulations!
This post has been upvoted by steemcurator07, due to the good quality of its content.
Curated By - @nadiaturrina
Curation Team - Team 4 Curators
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Thanks @nadiaturrina for the support
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I am Glad to hear that your country have CBDC. Because of this:
I don't think it is necessary to apply CBDC in our country. I am more in favor of cryptocurrency.
I also shared a participation post about CBDC. Kindly if you try to visit and marks my mistakes.
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Hello friend!
I'm @steem.history, who is steem witness.
Thank you for witnessvoting for me.
please click it!
(Go to https://steemit.com/~witnesses and type fbslo at the bottom of the page)
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It's nice to hear that your country has a CBDC, while my country, Indonesia, will only be implemented in 2023 and it's still about to be implemented. With the existence of CBDC we are safer and transactions are faster than before.
I also shared a post about CBDC, if you have time please see it and I am very happy.
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You have really done a good review about C BDC ,you did a very proper introduction and you also spoke well about the important as well their disadvantages and advantages
You also made a very good point concerning lack a f physical cash which can setting affect some economy because many people there believe in physical money and not electronic money.
But the truth of the matter is that this problem can easily be solved through the education of many people mind by making them understand that money can not only exit in physical cash but also in a liquid form
Thank for this wonderful review I really due appreciate
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Thanks for your comment and contributions
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You are highly welcome my good friend hope we stay good why we also steem
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your explanation about CBDC is soo appreciated you have explained all the points in good way your point;
if any country adopt this surely it developed their economic.
Good luck in the contest.
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Good to read that your country has its own CBDCs ,I hope the price of Naira will stabilize soon with the improvements in the digitalization of Nigeria.
It will support the fast and easy transactions.Thanks for sharing and Good luck.
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Oh ; it seems same as that our country. We have to pay 30% tax plus 1% TDS.
That's true but digit space is always vulnerable to attacks by tech savvy malaciois elements .
Absolutely true.
Good luck
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Thank you for your wonderful comments and contributions my friend.
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