Timothy 6:10: – For the love of money is the root of all evil: which while some coveted after, they have erred from the faith, and pierced themselves through with many sorrows.
There has been a rapid shift in the digitisation of many facets of our life over the years. One key element is having a fully digital medium of exchange. Indeed, digital currency has the potential to completely change how society thinks about money. The rise of Bitcoin, Ethereum, and thousands of other cryptocurrencies that exist only in electronic form has led global central banks to research how national digital currencies might work.
Digital currency is any currency that’s available exclusively in electronic form. Electronic versions of currency already predominate most countries’ financial systems. In the U.S.A., for instance, the physical U.S. currency in circulation is only about one-tenth of the overall money supply; the remainder is held in various bank deposits in electronic form.
But what exactly differentiates digital currency from electronic currency? Currently, most American bank accounts are electronic and never take physical form. Right now, you could go to an ATM and turn an electronic record of your currency holdings into physical dollars. Digital currency, however, never takes physical form. It always remains on a computer network and is exchanged via digital means. For example, instead of using physical dollar bills, you’d make purchases by transferring digital currency to retailers using your mobile device.
Of importance is the fact that decentralised cryptocurrencies, like Bitcoin and Ethereum, which store value but are not managed by any central authorities, have propelled governments and central banks around the world in the creation of their own digital currencies, commonly known as central bank digital currencies.
In August 2021, the Bank of Jamaica (BOJ) minted Jamaica’s first batch of central bank digital currency (CBDC). CBDC is a digital form of central bank-issued currency and therefore is legal tender. It is not to be confused with cryptocurrency, which is privately issued, generally not backed by a central authority, and does not perform all the essential functions of money. As legal tender, CBDC can be exchanged dollar for dollar with physical cash. Households and businesses will be able to use CBDC to make payments and store value, as now obtainS with cash. CBDC is backed by the issuing central bank and issued to authorised financial institutions, including deposit-taking institutions on a wholesale basis, just as it is being done with physical currency.
Some information obtained from Benjamin Curry, Retirement and Investing Editor for Forbes Advisor and https://boj.org.jm
