Whether or not you’d believe inflation could reach World War II levels, it’s clear that the global economy post-COVID-19 looks uncertain. A chasm is growing between the developed and developing markets fueled by uneven vaccination rates and Gross Domestic Product growth. Central Bank Digital Currencies (CBDCs) are set to be a key factor that’ll accelerate the world economy fit for the digital age, ushering in a digitally-connected economy unlike anything we’ve seen before.
Despite inflation being slowly on the rise, depressed economies like the U.S. are accelerating in their adoption of new economic policies like Modern Monetary Theory (MMT), which in a nutshell enables governments to print money at will. Basically, wealthier governments aren’t required to be reliant on taxes or borrowing when it comes to spending as they’re able to print money on demand. The stellar rise of MMT, particularly advocated by an economy with as much impact as the U.S., sends ripple effects that not only affect the U.S. but other economies as well. In Asia, governments – particularly in mid- and small-sized economies – are waking up to the potential power and influence that CBDCs have thanks to their latest understanding of MMT.
CBDCs draw influence from bitcoin, and bitcoin itself has transformed the public’s perception about money and alternative asset investments. In fact, many today consider it a hedge for inflation. Recently, crypto companies are increasingly coming under scrutiny with government action ramping up as the public’s interest in crypto has made way for governments that are beginning to recognize the plurality of bitcoin’s co-existence with fiat currency.
In fact, COVID-19 has accelerated an urgency to strike a balance on how this coexistence might look. Governments are looking for ways to employ an effective monetary policy that gives them more rights, with less reliance on the dollar for trade. As CBDCs hold a 1:1 value to fiat currency, they not…
