The journey to mass adoption is still considerably long, but positive encouragement from cryptocurrency enthusiasts have enabled the rise of such payments to become adopted early. In the past year alone, over 60% of payments were contactless. New payment models will soon dominate card-based platforms, including the need for these payments to be done in real-time.
Cryptocurrency respondents have voiced out a strong demand for some form of mechanism to support payments with cryptocurrencies. Nevertheless, there are limited plans to provide services in this space yet. Partnership with third parties was viewed to be the best solution for this issue, rather than creating an internal payment infrastructure internally.
Aside from the use of cryptocurrencies and stable coins, a new form of digital asset will be likely to be produced: Central Bank Digital Currencies (CBDC). China is committed to producing its own digital Yuan in time for the Winter Olympics, while the Reserve Bank of Australia is testing the waters on a wholesale CBDC. While talks of a retail (or general purpose) CBDC have yet to emerge, Australia is certain to take the right steps into payments with new digital assets.
No high-income economies have yet made the decision to issue a CBDC. Fed officials have pointed to ongoing improvements in existing payment systems, unsure of the uncertain benefits of a CBDC and the risks associated with it.
Distinguishing Between New Digital Assets
Tony Richards, Head of Payments Policy of the Reserve Bank of Australia addressed two key factors that investors should know of when distinguishing between cryptocurrencies, stablecoins and CBDCs.
The digital asset space has provided no shortage of research, analysis and policy work. Clearly, the digital asset space has gained momentum. While there is yet to be any disruption in the near future, investments into the digital asset world are being made.