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Govcoins will transform finance

Govcoins: The digital ill transform finance

Govcoins: The digital currencies that will transform finance

“The Economist” cover and their special report this week focus on a technology shift that promises to turn finance around.

Government digital currencies, or “govcoins”, are a new incarnation of money. They promise to make finance work better but also to shift power from individuals to the state, alter geopolitics and change how capital is allocated.

Instead of holding an account with a retail bank, you would hold one directly with a central bank, through an interface resembling apps such as Alipay or Venmo. Rather than writing cheques or paying online with a card, you could use the central bank’s cheap plumbing. And your money would be guaranteed by the full faith of the state, not a fallible bank.

Over 50 monetary authorities, in America, the EU, Britain and elsewhere, are exploring digital currencies. China is experimenting and the Bahamas has already issued its own.

Governments and financial firms need to prepare for a shift in how money works that is as momentous as the leap to metallic coins or payment cards—a shift that promises a vast spectrum of opportunities, but also real dangers. Source: The Economist

Also Read: From Gold and Dollars to Bitcoin and Central Bank Digital Currencies