Institutional investor MetLife Investment Management (MIM) has released a new macro strategy primer report on Jan. 8 that predicts central bank digital currencies (CBDCs) are not a passing fad. The report notes that CBDCs are a logical progression of money and technology and not something of a temporary factor. The investment giant further explains the forth-coming role of blockchain-based assets. MetLife Believes CBDCs Not a Passing Fad MetLife Investment Management (MIM) founded in 1868, noted that CBDCs are gaining momentum, despite issues unresolved by central banks. According to them, CBDCs gaining momentum is a logical progression of money and will likely play a great part in the future of finance. The investment company believes the key motivations for creating CBDCs include furthering financial inclusion globally, blocking criminal use of cash, improving electronic payments infrastructure, and enhancing policy tools. In the case of the United States, a CBDC creation involves strengthening the reserve status of the U.S. Dollar. A central bank might have motivations beyond the egalitarian motive of banking the unbanked. MIM believes China is expected to be the first major sovereign power to implement a large-scale CBDC initiative. That itself will open up the avenue of expanding the footprint of its digital economy. As of September 2016, MIM handled $651 billion in assets under management (AUM). CBDC to Receive Increased Attention In advanced countries, CBDCs are seen to potentially enhance financial stability by allowing for more direct control of the money supply by the central bank. As the world becomes more interconnected and digitized, CBDCs will receive increased attention from authorities and consumers worldwide. However, the report also noted that the real launch of CBDC among Western countries seems unlikely to happen in the coming months as key technical issues are yet to be addressed. The document added: “However, just as the dreams of cryptocurrency developers tend to be rather lofty, so are those of various CBDC initiatives.”
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