Digital Central Bank Currencies (CBDC) will ensure the confidentiality of user data and prevent its transfer to commercial platforms, according to Michael Lee, a researcher at the Federal Reserve System (FRS).
Lee worked on the report with Rod Garrett, Professor of Economics at the University of California. They believe that when making digital payments over Bitcoin Champion, companies collect personal data from customers, while cash allows the latter to remain anonymous.
Payment platforms and large companies can use the information they receive for commercial purposes or to combat competitors, the authors of the report noted. Lee and Garrett saw the CBDC as a solution, calling them the “best successors” of cash in terms of consumer protection.
According to the researchers, existing cryptov currencies are losing out to digital assets at central banks due to high transaction costs.
Deutsche Bank analysts called on European authorities to accelerate the development of CBDC. In their opinion, in the long term, digital currencies will replace cash.
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