{"id":172939,"date":"2023-03-23T23:26:22","date_gmt":"2023-03-23T23:26:22","guid":{"rendered":"https:\/\/precoinnews.com\/?p=172939"},"modified":"2023-03-23T23:26:22","modified_gmt":"2023-03-23T23:26:22","slug":"bank-profits-at-risk-from-potential-cbdc-transformation-of-global-economy-moodys","status":"publish","type":"post","link":"https:\/\/precoinnews.com\/crypto\/bank-profits-at-risk-from-potential-cbdc-transformation-of-global-economy-moodys\/","title":{"rendered":"Bank profits at risk from potential CBDC transformation of global economy: Moody\u2019s"},"content":{"rendered":"

Emerging central bank digital currency (CBDC) cross-border transaction technology could transform the global economy by providing faster, cheaperand safer services for many of its players. But banks may not fare as well in that new economy, Moody\u2019s Investor Service said in a report dated March 21.<\/p>\n

Many proposals for the domestic use of CBDCs foresee a crucial intermediating role for banks in their operations, but cross-border CBDC transactions would depend on entirely new infrastructure that reduced the role of banks more severely, Moody\u2019s pointed out. Banks would see benefits from the new technology, too. Settlement risk could be reduced or eliminated:<\/p>\n

\u201cBanks would be able to make, clear, and settle cross-border payments at low cost and in seconds without needing to sign up to multiple payment systems or rely on correspondent banks in other countries.\u201d<\/p><\/blockquote>\n

The same innovations would also \u201creduce banks\u2019 profits from payments, correspondent services and likely also from foreign-exchange transactions.\u201d The role of correspondent banks could be eliminated entirely. Not only that:<\/p>\n

\u201cIn a CBDC-driven economy, banks may well need to redesign their operations. They may be obliged to join new networks and create the infrastructure necessary to support CBDC interoperability at scale, which will impose a burden on resources in the short term.\u201d<\/p><\/blockquote>\n

Interoperability for both retail and wholesale CBDC is being worked out in experimental projects, often with the participation of the Bank for International Settlements. \u201cCentral banks may need to compromise on some of the decision-making to make their CBDCs interoperable,\u201d Moody\u2019s said. Otherwise, \u201cdigital islands\u201d could be created among small groups of countries that can transact with each other but no other countries.<\/p>\n

Related: India, UAE to explore CBDC bridge to facilitate trade, remittances without USD<\/em><\/strong><\/p>\n

Issues such as Anti-Money Laundering, sanctions and privacy would require a legal and regulatory framework, and support for CBDCs is not universal. \u201cFinancial incumbents who benefit from existing architecture will likely not help facilitate adoption,\u201d the report said.<\/p>\n

A U.S. CBDC faces opposition from some lawmakers because of privacy concerns. Direct exchange of currencies could also reduce the role of the U.S. dollar in the world economy, which does not add to its appeal in Congress. <\/p>\n

Moody\u2019s downgraded the U.S. banking sector to \u201cnegative\u201d on March 14. It has examined the potentially disruptive effects of CBDC on commercial banking before. The present report came out nearly simultaneously with the U.S. Treasury report detailing potential effects a CBDC could have on the domestic banking system. <\/p>\n

Source: Read Full Article<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Emerging central bank digital currency (CBDC) cross-border<\/p>\n","protected":false},"author":3,"featured_media":172938,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"yoast_head":"\nBank profits at risk from potential CBDC transformation of global economy: Moody\u2019s - Pre Coin News<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/precoinnews.com\/crypto\/bank-profits-at-risk-from-potential-cbdc-transformation-of-global-economy-moodys\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Bank profits at risk from potential CBDC transformation of global economy: Moody\u2019s - Pre Coin News\" \/>\n<meta property=\"og:description\" content=\"Emerging central bank digital currency (CBDC) cross-border\" \/>\n<meta property=\"og:url\" content=\"https:\/\/precoinnews.com\/crypto\/bank-profits-at-risk-from-potential-cbdc-transformation-of-global-economy-moodys\/\" \/>\n<meta property=\"og:site_name\" content=\"Pre Coin News\" \/>\n<meta property=\"article:published_time\" content=\"2023-03-23T23:26:22+00:00\" \/>\n<meta name=\"author\" content=\"mediabest\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:image\" content=\"https:\/\/precoinnews.com\/wp-content\/uploads\/2023\/03\/Bank-profits-at-risk-from-potential-CBDC-transformation-of-global-economy-Moodys.jpg\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"mediabest\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/precoinnews.com\/crypto\/bank-profits-at-risk-from-potential-cbdc-transformation-of-global-economy-moodys\/\",\"url\":\"https:\/\/precoinnews.com\/crypto\/bank-profits-at-risk-from-potential-cbdc-transformation-of-global-economy-moodys\/\",\"name\":\"Bank profits at risk from potential CBDC transformation of global economy: Moody\u2019s - 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