The steady migration to wider use of digital-based services, especially in the financial sector, has been the subject of ongoing debates. It appears based on the brief review of MIT’s plumbing of the coming changes in the article that the debate will continue to be held for the foreseeable future.
The paper highlighted the importance of digital currencies in digital banking saying: “Digital banking of the future is unimaginable without using digital currency”. To that end, it notes the current efforts by both central (PBOC, BoE and Bank of Russia) and private banks.
It says that the best known non-bank digital currency is Bitcoin, adding that it is not suited for high volume transactions because of its low transactions per second (TPS) capacity. MIT expects that other digital currencies based on consensus achievable by means other than proof-of-work will be used in digital banking.
Mercator Advisory Group recognizes the transition to wider use of digital currencies does come with several pitfalls that the article does not call out in its review of the article in questions. At present, there are large swathes of global citizens that are effectively outside of the present banking system. What does a total migration to digital currency mean for the unbanked, and what allowances will be made to accommodate for this segment of our population?
There are efforts in some nations to assign unique identification numbers to members to citizens to facilitate the migration to digital currency, but the effort has proven to be insurmountable, even with the application of cutting edge IT technologies. While the widespread use of digital currency will predominate eventually, there are many real-world obstacles that will require satisfactory resolution to ensure inclusivity.
Overview by Joseph Walent, Senior Analysts, Emerging Technologies Advisory Service at Mercator Advisory Group
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