{"id":8609,"date":"2021-06-22T23:54:38","date_gmt":"2021-06-22T23:54:38","guid":{"rendered":"https:\/\/www.buyucoin.com\/crypto-labs\/new-bank-of-america-report-says-digital-currencies-could-boost-economic-growth-in-developing-countries\/"},"modified":"2021-06-22T23:54:38","modified_gmt":"2021-06-22T23:54:38","slug":"new-bank-of-america-report-says-digital-currencies-could-boost-economic-growth-in-developing-countries","status":"publish","type":"post","link":"https:\/\/www.buyucoin.com\/crypto-labs\/new-bank-of-america-report-says-digital-currencies-could-boost-economic-growth-in-developing-countries\/","title":{"rendered":"New Bank of America Report Says Digital Currencies \u2018Could Boost Economic Growth\u2019 in Developing Countries"},"content":{"rendered":"

A new Bank of America (BOA) research study has found that both central bank digital currencies (CBDCs) and private digital currencies hold \u201ca lot of potential\u201d for increasing financial inclusion in developing countries. In the report, the bank also argues that such \u201cdigital currencies could reduce transaction costs and allow more economic activities in emerging market economies.\u201d <\/strong><\/p>\n

Digital Currencies and Financial Inclusion<\/h2>\n

Still, the study findings show that while digital currencies are likely to \u201cboost economic growth\u201d in developing countries, their adoption will carry some risk. In addition, the study also finds that the rise of digital currencies \u201ccould lead to inflation and dollarization.\u201d<\/p>\n

Meanwhile, a separate report<\/a> quotes David Hauner, the BOA\u2019s head of emerging market cross-asset strategy and economics for EMEA, explaining why digital currencies could be pivotal in emerging market countries where more than 50% of adults lack a bank account.<\/p>\n

\u201cDigital currencies have the potential to address many practical constraints on financial services in poor countries,\u201d said Hauner.<\/p>\n

The report also lists the reduction of cross-border payment costs as well as the reduction of corruption and other illegal activities as some of the constraints that can be addressed by digital currencies.<\/p>\n

<\/p>\n

Risks to Physical Currency<\/h2>\n

The BOA research study found that the rise of digital currencies could potentially \u201cundermine a country\u2019s physical currency,\u201d however. Expanding on these findings, Hauner stated:<\/p>\n

Easier access to alternative digital currencies is also likely to increase the volatility of domestic money supply and the exchange rate. Easier access to alternatives also raises the risks of rapid shifts of liquidity out of (or into) the currency and the banks which can magnify macro volatility in already less stable countries. Higher macro volatility would then reduce the effectiveness of policies and undermine the long-term rate of growth.<\/p>\n

Despite these risks, Hauner suggests that more central banks are \u201clikely to issue a general purpose CBDC in the next three years.\u201d As previously reported by Bitcoin.com News, several countries \u2014 including a few in Africa<\/a> \u2014 are currently at different stages of developing or piloting their digital currencies. Several more countries are likely to join the race as more studies show that digital currency benefits outweigh the risks.<\/p>\n

What are your thoughts on the latest BOA research report on digital currencies? You can share your views in the comments section below.<\/strong><\/em><\/p>\n

Bitcoin News
\nFintech, Bank of America, central bank digital currency, Cross Border Payment, David Hauner, Digital Currencies, domestic money supply, Exchange rate, financial inclusion<\/p>\n","protected":false},"excerpt":{"rendered":"

A new Bank of America (BOA) research study has found that both central bank digital currencies (CBDCs) and private digital currencies hold \u201ca lot of potential\u201d for increasing financial inclusion in developing countries. In the report, the bank also argues that such \u201cdigital currencies could reduce transaction costs and allow more economic activities in emerging…<\/p>\n","protected":false},"author":0,"featured_media":8610,"comment_status":"","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[53,3],"tags":[],"class_list":["post-8609","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blockchain-news","category-coin-news"],"_links":{"self":[{"href":"https:\/\/www.buyucoin.com\/crypto-labs\/wp-json\/wp\/v2\/posts\/8609"}],"collection":[{"href":"https:\/\/www.buyucoin.com\/crypto-labs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.buyucoin.com\/crypto-labs\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/www.buyucoin.com\/crypto-labs\/wp-json\/wp\/v2\/comments?post=8609"}],"version-history":[{"count":0,"href":"https:\/\/www.buyucoin.com\/crypto-labs\/wp-json\/wp\/v2\/posts\/8609\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.buyucoin.com\/crypto-labs\/wp-json\/wp\/v2\/media\/8610"}],"wp:attachment":[{"href":"https:\/\/www.buyucoin.com\/crypto-labs\/wp-json\/wp\/v2\/media?parent=8609"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.buyucoin.com\/crypto-labs\/wp-json\/wp\/v2\/categories?post=8609"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.buyucoin.com\/crypto-labs\/wp-json\/wp\/v2\/tags?post=8609"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}