Banking is an indispensable commodity. 
It allows us to safely store our money, make payments and borrow money for outsized financial commitments. Bearing this in mind, the advantages of banks reside in deposits security, the convenience of making payments and the flexibility of borrowing money.
What if the security of our deposits is not guaranteed?
As of 2014, only 112 countries, representing 59% of countries surveyed, had explicit deposit insurance schemes pledging to compensate customers for lost deposits due to bank insolvency. This represents a sharp increase from 84 countries (44%) in 2003. Despite this progress, the prospect of deposit insurance remains questionable for many countries. In these countries, banks that go into liquidation deprive depositors of their funds. This puts the livelihoods of citizens at risk.
Entrusting our money with a private digital currency issuer (e.g. stable coins issuers) represents an even riskier solution. How do private issuers manage transaction data? Do they effectively risk-manage fluctuations in collateralised assets? Do consumers realise that there are no safety nets to safeguard their assets if it comes to worst?
Many of these private digital currency issuers say they want to reach the 1.7 billion unbanked. Nevertheless, is this not the responsibility of central banks around the world?
Central Bank Digital Currencies (CBDC): A viable alternative?
Over the past two decades, the emergence of Internet-based products and services led to a paradigm shift with the worldās transactions moving into a digitally connected economy. Companies like PayPal, Stripe, Ant Financial, and Revolut have emerged as industry leaders, benefiting from this shift to online and digital commerce.
On the backdrop of innovations like blockchain and stablecoin technologies, central banks came up with the idea of creating a digital form of cash as an alternative to private digital currencies. This is what we call Central Bank Digital Currencies.
- A CBDC would be a new form of central bank money, issued and controlled by the central bank. The CBDC supply is determined by monetary policy and controlled by the central bank.
- A CBDC must be accepted as a means of payment and a safe store of value by all citizens, enterprises, and government agencies.
- A CBDC is distributed at one-to-one parity with relevant fiat by the central bank and should be seamlessly and freely convertible against cash.
- Consumers should not need a bank account to obtain and use a CBDC.
- The cost of a transaction should be lower than current systems.
- Because CBDC is provided directly by the central bank as opposed to an intermediary (i.e. a retail bank), deposits are not under threat of 3rd party risk.
āAccording to the Bank of International Settlements, over 80% of central banks are looking at issuing a digital currency on a blockchain.ā
Taking a case study approach, Bahamas gave residents easier access to financial services in light of economic difficulties following damages of Hurricane Dorin on the financial infrastructure. Hence, they enabled the public to use the CBDC wallet without any bank account and without asking for any user identification for small amounts.
Some questions to get the discussion rolling: 
Do you believe that using CBDC can increase financial inclusion?
How much time will it take for the global financial infrastructure to shift to digital? Why?
Will the implementation of CBDC stifle or nurture the emergence of digital currencies?
Can the implementation of CBDC reduce tax evasion and money laundering?
What happens if central banks do not go digital?
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