Trust has always been a major factor throughout the development of finance. In using a currency, traders put trust in its liquidity and guaranteed value. In using a payment system, merchants trust that as long as they are paying gatekeeping fees to a central authority, they can have an insurance against fraudsters. Read More
In a previous post we discussed the plausibility and benefits of a government-backed digital currency, particularly one based on the cryptocurrency model. We found that while the available technologies and protocols are highly promising, central banks still need to overcome some big hurdles before they could truly roll out the concept. On one side, such system will need to prove its efficacy in terms of performance to businesses and banks. On the other side, it also needs to show consumer-level users how it would be more secure and convenient to use in everyday transactions than current forms of money.