When we follow the story of money throughout history, we see that technology has changed the use of money. The discovery of credit cards or the development of electronic funds transfer systems can be considered as steps in the replacement of paper money by digital systems. Blockchain Technology, on the other hand, is perhaps a brand new breakthrough in the digital transformation of the monetary system. Central banks all over the world have begun to recognize this change and transformation and take steps in this direction. These days, the central banks of almost every country, from the Fed to the ECB, from the BofE to the CBRT, are working on this issue. However, the countries that show the most intensive development in this regard today are generally Asian countries and especially China, the world’s growing economic power.
The Central Bank of China, which has been working seriously on the digital yuan, has started the testing process for this purpose . As former Bank of China Governor Li Lihui noted, the Digital Yuan can be expected to replace cash or other payment systems in the night. As such studies progress, we will start to see that crypto coins
are more involved in the world trade system. China, perhaps the most important country in world trade, will want to take the lead in this regard and gain a greater place in the global monetary and financial system.
On the other hand, the Fed’s work on producing digital dollars for cash supports to be distributed by the government to American citizens during the coronavirus process has come to the agenda. We can say that it will not be possible to escape from digitalization for the dollar, the most intensively used commercial currency all over the world.
In addition, the active use of central bank digital currencies in trade will be useful in terms of identifying payments. This is extremely important in terms of being a step that will eliminate the informal economy. In today’s monetary system, printing and distributing paper money is a cost item for central banks. Central bank digital currencies will significantly reduce this cost, also increasing seigniorage profits. Due to such advantages, central bank crypto coins are expected to increasingly take place in the crypto money ecosystem.
The Inthanon Project and the provision of FX price discovery between the central banks of Hong Kong and Thailand could be a development that will cause very significant changes in the world trade system by paving the way for countries to trade with their own currencies. This situation seems to be a candidate to shake the throne of the dollar, which is the most used currency in world trade today. Of course, considering the contention between China and the United States, it should not be difficult to understand why China is so interested in this technology. As a result, we can say that the trading system that looks at what will come out between the two lips of a country (the United States) or a person (the President of the United States) will also become freer.
In addition, the central bank will bring about significant changes in the trading and financial system with the introduction of crypto coins, while it will also lead to significant changes in the crypto money system. First of all, the involvement of central banks will mean the inclusion of state authority in this system. For this reason, we will have to wait for some government regulations for the crypto money system. We can say that the lack of control, which is a criticism produced against crypto coins, will disappear in this case. Today, the institutions that are most ready for these regulations in the crypto money ecosystem and the companies that are most ready to use this technology in trade will provide serious advantages.
