30s Summary

The Bank for International Settlements (BIS) has proposed a hybrid retail central bank digital currency (CBDC), which combines token-based and account-based models. Under this system, the central bank would issue and oversee the CBDC, while commercial banks provide the related services. Despite its potential to enhance transaction privacy, CBDCs have faced criticism for potential risks to privacy, stability and practicality. In fact, both the U.S. and Canada have demonstrated resistance towards CBDCs, citing concerns over individual freedom and lack of public interest respectively. Meanwhile, European Parliament member Sarah Knafo has suggested the EU should adopt Bitcoin, rather than develop a digital euro.

Full Article

The Bank for International Settlements (BIS) has come up with a new idea for a retail central bank digital currency (CBDC). They suggest a “hybrid” structure – the country’s central bank deals with issuing the CBDC and overseeing it, while normal banks manage the services for everyday people.

This system would be designed in a way that keeps things flexible and easy to use. Plus, it would focus more on a “token-based” model. This would help protect your privacy a lot better!

But, don’t worry if you prefer account-based models – where you have a specific account linked to a person or a group – this system can handle that too. One of the key features of this model is its ability to keep your transactions and your identity separate. This decreases potential risks and further boosts privacy compared to other systems.

While this all sounds great, CBDCs have come under fire for potentially posing threats to privacy, stability, and practicality. Even some central banks have raised concerns.

The CBDC concept hasn’t been universally welcomed. Back in September, the Bank of Canada backed down from creating a CBDC because most Canadians simply weren’t interested in using one.

And in the U.S., a lawyer known for representing XRP holders in a lawsuit against the Securities and Exchange Commission (SEC), John Deaton, pledged to stand against CBDCs. He cited fears about the impact on individual freedom when a central body manages a digital record.

Missouri lawmaker Rick Brattin even drafted a bill in December 2024 that would forbid the use of CBDCs in the state. This bill also proposed to stop any exploration or creation of CBDC.

Meanwhile, European Parliament member Sarah Knafo believes the European Union should give up on CBDCs altogether and instead back Bitcoin. According to Knafo, the digital euro is just an attempt to enforce totalitarianism. She suggests that the European Union should use Bitcoin as its strategic reserve, just like other countries worldwide.