Bank Of Finland Says CBDC Creates Better Payment Facilitation For Users

Olli Rehn, governor of the Bank of Finland, touted the possibility of a digital euro centralized bank digital currency (CBDC) working in tandem with private fintech solutions to facilitate cross-border payment of services across Europe in a novel address at the University of California Berkley published on Wednesday.

The European Central Bank’s (ECB) examination into the viability of a digital euro began in late 2021 and is expected to be completed in October 2023. Rehn described the experimental digital euro’s utility, saying:

“A digital euro would give people an additional choice about how to pay and would make it easier to do so in an increasingly digital economy. It would expand the availability of digital central bank money beyond transactions between banks to include everyday peer-to-peer payments between people, covering online shopping as well as bricks and mortar businesses.”

Rehn stated that because privately generated cryptocurrencies lack a monetary basis, they are intrinsically unstable.

“Digitalization is making financial services more efficient but leaving them more vulnerable to cyber-attacks and other forms of cyber risks,” he said.

According to Olli Rehn, such vulnerabilities to money laundering, financial fraud, and other illicit activities are compelling reasons for CBDCs to provide “safe and legal means of payment in the digital age via CBDCs.”

The ECB chose CBDCs as the optimum method for cross-border payments above stablecoins and other cryptos earlier this month. The ECB questioned the settlement durations existing in networks like Bitcoin in the paper, claiming that the value discrepancies between transfer start and finalization make it ideal for large-sum transactions.

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