Central Bank Digital Currency (CBDC); a paradigm shift in the world of money. Virtual currencies have progressed from a ‘side show’ to a ‘main event’, commanding serious attention from the world’s most powerful financial institutions. As of 2021, it is estimated that there are more than 300 million crypto users worldwide, with over 18,000 businesses already accepting crypto payments.
“If you can’t beat them, join them” seems to be the mantra of governments, banks and financial institutions worldwide. Or, perhaps more accurately, “if you can’t beat them, become them.”
What’s driving the centralisation of virtual currencies?
There are multiple factors driving a change in path for virtual currencies:
Cashless societies: According to Paysafe54% of UK consumers have used new forms of payments since the Covid-19 outbreak began, and 84% are now thinking differently about how they make payments. With mass adoption certainly a possibility banks are trying to make sense of all the noise and find some way to incorporate digital currency into mainstream operations.
“Stablecoins”: Whilst cryptos are certainly popular, they are also quite volatile, something that may be addressed through so called ‘stablecoins’, currencies tied to government sponsored ‘fiat’ currencies. Banks seek to remove the decentralised anonymity that gives crypto it’s name and regulate digital currencies under a central authority.
The BoE last month released an extensive report detailing plans as to how they might realistically regulate stablecoins, including discussion of a new Central Bank Digital Currency, humorously dubbed “Britcoin” by finance minister Rishi Sunak.
Government control: The move towards centralising control of virtual currencies is global, with China spearheading virtual currency progress and the USA Federal Reserve starting to explore digital dollar possibilities. The People’s Bank of China announced last month that it will be trialling it’s new digital Yuan to Beijing residents, doling out $6.2m though a lottery system, as part of a $30m experiment.
Where are the opportunities for business and professionals?
The virtual currency space is already thriving with opportunity for careers and businesses. An increasingly centralised virtual currency ecosystem is likely to change (and significantly expand) opportunities.
Currency implementation: New currencies will require consumer-friendly software. Demand for blockchain, UX design and cybersecurity expertise will certainly be high, but there’ll also be a need for designers who understand how to engage consumers of all kinds.
Data analysis: This currency is a step toward mainstream virtual adoption, so data analysis will be critical for companies trying to get ahead. The huge amount of data this new arena provides will require teams of data scientists, engineers and analysts to streamline into useful information.
Compliance requirements: If Central Banks such as the Bank of England regulate some from of “stablecoin”, companies will need experienced compliance talent to navigate new and potentially turbulent compliance requirements.
Interested to explore more?
Virtual currencies are a fast-emerging space. Connect with Headcount today to discuss opportunities in Europe and worldwide.