Blockchain: Is it a hype or a hoax?  41

• Crypto.com (https://crypto.com/nft) has recently also launched the

NFT marketplace on top of a successful crypto wallet and exchange.

CDBC revolution

Over the past few years, we have seen a lot of technological revolutions in

the financial industry, e.g. mobile banking, and mobile payment solutions

from tech giants like Apply Pay, Google Pay, PayPal and Amazon, to name

a few. There also has been some disruption in online payments and e-wal-

lets as a substantial portion of traditional banking are now carried out

through mobile and digital payments. One of the major advancements has

been advancements in the acceptance of Bitcoin currency as an asset class

by fund managers who insist that it belongs in any balanced portfolio.

One of the upcoming disruptions that would be the most revolutionary is the

creation of government digital currencies, which can provide a facility for peo-

ple to deposit funds directly with a central bank bypassing conventional lenders.

As per The Economist (https://www.economist.com/), these ‘govcoins’

are a new incarnation of money. They promise to make finance work better

but also to shift power from the individual to the state, alter geopolitics and

change how capital is allocated. They are to be treated with optimism and

humility.

Government or CBDCs seem to be setting the stone of the digital finan-

cial world; however, they come with a twist. CBDC would ultimately cen-

tralise power in the state government rather than spread it through various

payment networks and/or conventional banks.

Imagine a possibility whereby instead of holding an account with a retail

bank, customers can directly open an account with a central bank through

an interface similar to apps such as Apple Pay, Alipay etc. Another pos-

sibility might be that customers can directly deal with the central bank for

any transaction discrepancy support, rather than calling Barclays’s sup-

port, saving commission usually charged by retail banks or intermediar-

ies like Mastercard/VISA. Rather than paying by a credit card or cheque,

customers would be able to use the central bank application and also have

more security as their money would be backed by a government guarantee.

The above hypothesis looks unreal; however, it is already underway.

Over 50 monetary authorities are exploring central bank digital currencies.

The following are some of the initiatives that have been kicked off or are

already established and in use.

• The Bank of England & HMRC in the UK published a discussion

paper on 12 March 2020 about opportunities, challenges and design.

The discussion paper can be accessed using the link: https://www.

bankofengland.co.uk/research/digital-currencies

• On 19 April 2021, the Bank of England and HM Treasury announced

the joint creation of a CBDC Taskforce to coordinate the exploration

of a potential UK CBDC.