Will state-issued digital coins compete with cryptocurrencies in 2022?

In the upcoming year 2022, state-issued digital coins are poised to enter a new era of competition with cryptocurrencies.

According to Eswar Prasad, a renowned trade policy professor at Cornell University in New York, more nations are embarking on trials of their own central bank digital currencies (CBDCs).

Prasad observed that "Central banks around the world are bowing to the reality that digital payments are becoming the norm." This recognition signifies a shift in traditional monetary policies towards embracing digitalization.

The emergence of CBDCs is seen as a potential threat to the dominance of private cryptocurrencies like Bitcoin and Ethereum. However, it also presents an opportunity for cryptocurrencies to coexist and innovate in this evolving financial landscape.

The introduction of CBDCs by various nations is expected to enhance cross-border payments, improve financial inclusion, and reduce reliance on traditional banking systems. However, the implications for private cryptocurrencies remain to be seen.