Major institutions are beginning to pay attention to and are increasingly looking into the potential future of digital assets and the likelihood of their adoption in the future as the cryptocurrency sector expands, including the Bank of America (NYSE: BAC).
Indeed, central bank digital currencies (CBDCs) and stablecoins have been singled out by the BoA’s analysts under the leadership of Alkesh Shah as the natural evolution of money and a key element in how money would be defined in the future, according to Will Canny of CoinDesk on January 17.
The analysis stresses that CBDCs might “revolutionize global financial systems and may be the most significant technology innovation in the history of money,” as stated in the experts’ research note.
The BoA also expects financial regulators and central banks in wealthy and developing nations to take notice of CBDCs’ potential for greater efficiency and lower costs.
Despite this, the team acknowledges that there is still a chance that this type of currency will increase competition for bank deposits, result in a loss of monetary sovereignty, and promote inequality among nations.
The BoA emphasizes that central banks should keep up with technological advancements even though it is not optimistic that all nations will implement CBDCs within the next ten years. Otherwise, they “risk irrelevance over the longer term.”
In order to spur innovation in the field of digital assets, such as CBDCs and stablecoins, governments and central banks around the world are anticipated to rely on the private sector.
In May 2022, Brian Moynihan, the CEO of the BoA, stated that the bank had “hundreds of patents on blockchain as a process, as a tool, and as a technology,” but that legislation was impeding banks’ growth in the cryptocurrency industry.