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Government Considering Digital Currency

Government Considering Digital Currency
Photo Courtesy: Cointelegraph

The government is considering over-swapping to digital currency, a move thought to be faster, cheaper, and more transparent in transactions. Many specialists also believe that problems connected to the disappearance of lower-denomination currencies will be no more under the latest order of currencies attuned to the cusp of technology-driven global changes. So, the article is about Government Considering Digital Currency.

This is just a digital arrangement of the existing fiat currency. But it has many drawbacks, like, the loss of people’s privacy and security as the central bank will see via how it is earned and spent, and whether the proper amount of tax is paid. Consequently, they express that the digital version of the money, called central bank digital currency (CBDC), is meant to avoid some defects associated with existing fiat money.

Before fiat money came into favor, there were many transitions, and putting an end to barter trade, gold standards came in.

The system ensured the conversion of currencies into gold. However, the fiat currency is backed by some metals and reserves along with a decree by the government announcing it as legal tender. Many states are now opting for the use of CBDC, which will be under the central bank’s control. In this case, the major bank issues electronic coins or accounts backed by the government.

Finance Minister AHM Mustafa Kamal, in his budget speech for the current fiscal year 2022-23, said that as the risky use of virtual currencies such as crypto-currencies resumed to increase worldwide, many central banks around the globe were working on launching digital versions of their currencies as an alternative to crypto. Therefore, he mentioned that Bangladesh Bank will perform a feasibility study on the possibility of introducing CDBC in Bangladesh.

Masud Biswas, Director-general at the Bangladesh Financial Intelligence Unit or BFIU, the central agency to fight against money laundering, terrorist financing, and the financing proliferation of weapons of mass destruction, said, “The digitization is a more transparent solution as the authority can monitor it.” He, however, constructed it clear that CBDC is not cryptocurrency. He added that crypto, actually digital assets based on blockchain technology, has even generated divisions in Europe and is not the law of the land.

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