Mastercard expert Ashok Venkateswaran has expressed skepticism about the current viability of widespread central bank digital currencies (CBDCs), stating that broad adoption of CBDCs could be “difficult,” according to CNBC.
Venkateswaran, Mastercard’s Blockchain and Digital Assets Lead for Asia-Pacific, discussed the complexities surrounding CBDC implementation during the Singapore FinTech Festival. He noted that for CBDCs to be successful, they must be as accessible and spendable as traditional cash.
“The difficult part is the adoption. So if you have CBDC in your wallet, you should be able to spend them anywhere you want, very similar to cash today,” Venkateswaran said.
However, CBDC implementation would require substantial infrastructure development, a process that would involve considerable time and investment.
“[Building infrastructure to facilitate that] It takes a lot of time and effort on the part of the country to do that. But today many of the central banks have become very innovative because they are working very closely with private companies like ours to create that ecosystem,” Venkateswaran said.
Global reality of CBDCs: progress and challenges
Although International Monetary Fund Managing Director Kristalina Georgieva stated that CBDCs are “a secure, low-cost alternative” to cash and can “replace cash, which is costly to distribute in island economies,” the overall implementation rate is relatively low.
According to the Atlantic Council, 130 countries representing 98 percent of the global economy are exploring central bank digital currencies. However, only 11 of them have fully launched a digital currency. And even if a CBDC were introduced, consumers would still be “so comfortable using the current type of money” that “there is not enough justification to have a CBDC,” Venkateswaran said.
On November 7, Mastercard announced that it had completed the Hong Kong Monetary Authority’s (HKMA) e-HKD Pilot Programme, showing its ability to boost or assist in the launch of digital currencies such as the e-HKD.
