- Top U.N. official says digital assets, particularly central bank-issued digital payment systems may soon replace bank accounts due to the low-interest rates.
Massimo Buonomo, a United Nations global blockchain and fintech expert, said the rising development of CBDCs and the low interest (negative) rates offered in commercial bank accounts may act as a catalyst to make corporate bank accounts obsolete.
The corporate banking system deficiencies are getting exemplified over the years and the monopoly on digital payments finally being challenged by cryptocurrencies, opening a way to the extinction of bank accounts, Buonomo explained.
In another interview on City AM this Thursday, Buonomo urged the need for adoption of cryptocurrencies and blockchain technologies to combat the global COVID-19 pandemic and the state of the current Bitcoin market.
Massimo sees the exponential growth of digital currencies development killing off the need for bank accounts completely. The global monetary system does not give any signal of getting better any time soon either. For instance, the Federal Reserve chairman, Jerome Powell, called for more financial stimulus in the economy, and Trump called for a possible extension of negative interest rates.
‘CBDCs over public blockchains’
While Massimo remains a big fan of public blockchains such as BTC and ETH, he believes the implementation of a central bank based is more suitable to be used as a national currency. The scalability and congestion issues combined with the technological limitations on the legacy blockchain systems still hinder mass adoption hence the call for the central bank to step in.
Research published by the Philadelphia Fed Reserve on June 1, shared the opinion that the development of a CBDC may replace the role of commercial banks. The proposed implementation of a digital USD by the Digital Dollar Foundation, the ECB’s plans of a retail CBDC, and China’s accelerated efforts on launching a digital Yuan all culminate in a possible commercial bank death spiral as the middleman.
U.N. takes on cryptocurrency and blockchain development
United Nations has taken a keen interest in blockchain technology and cryptocurrency implementation over the past few years. The World Food Program has run tests of a blockchain food distribution system in African countries to ease the refugee aid process.
In October 2019, UNICEF opened up a donation website accepting Ethereum, ETH Foundation donating 100 ETH (~$20,000 at the time). UNICEF also opened up tests on blockchain projects in different fields – providing internet to Kyrgyzstan schools, a bounty token system, and extensive donations to blockchain projects.