According to Shyam Nagarajan, issuers should contemplate a hybrid approach of permitted and unpermitted money.
Shyam Nagarajan, an executive partner at IBM Consulting, said on Monday’s “First Mover” from the World Economic Forum’s annual meeting in Davos, Switzerland, that central bank digital currencies (CBDCs) have the ability to alter payment systems.
CBDCs are the future of money, according to Nagarajan, but issuers must explore a hybrid-like strategy. “They are, in a sense, replacing the present digital money system,” Nagarajan said. This is a great situation where both permission and permissionless access is required.
Despite the fact that many CBDC pilot programs are still in the development phase, Nagarajan said that CBDCs would ultimately be used to make payments. Stablecoins, a kind of cryptocurrency tied to real-world commodities such as gold or the U.S. dollar, function as “stopgaps until CBDCS are accessible on the market”
Rob Massey, the global tax head for blockchain and cryptocurrencies at Deloitte, repeated Nagarajan’s remarks in a different portion of “First Mover.” The ability to employ programmable money with smart contracts may minimize friction and “assist large-scale organizations in enhancing their degree of transparency and real-time payment systems,” according to him.
Massey said, “It’s definitely where we’re headed,” but he added that not all CBDCs, stablecoins, and smart-contract systems “are made equal.”
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