The COTI co-founder believes that the controversy surrounding central bank digital currencies will subside as major financial players adopt technology and optimal designs are established. However, the co-founders downplayed the possibility that central bank digital currencies could interface with decentralized finance protocols or Web3 ecosystems.
Privacy is important for CBDC implementation
Shahaf Bar-Geffen, co-founder of blockchain technology company COTI, believes the current controversy over central bank digital currency (CBDC) will decrease as major financial players embrace technology and optimal design is established. Veteran tech entrepreneur Bar-Geffen made these comments in response to questions about a contrasting global approach to CBDC.
Bar-Geffen has modernized financial services to modern needs, highlighting potential benefits when making CBDCS claims, highlighting its ability to provide citizens with fast, minimally infringing cross-border payments.
“The CBDC provides issuers (central banks and governments) with a way to provide citizens with fast, minimally infringing cross-border payments, modernize financial services and make them fit for the times we live in,” he said.
He further pointed out that privacy is an important aspect of CBDC implementation and cited Koty’s work to protect Koty’s work with the Bank of Israel. “The COTI team last year as part of the Digital Shekel Challenge, authorised to work closely with this solution and integrate COTI’s privacy solutions to protect users, which is a must for CBDC.”
Some countries are actively investigating and conducting CBDCs, while others, including the US government, have expressed their reservations. The Trump administration has even issued an executive order effectively banning federal agencies from creating CBDCs.
However, Bar-Geffen attributes apparent slow implementations in traditional financial institutions to the inherent challenges of a large-scale technological transition.
“However, many CBDC projects are still in the R&D phase as traditional financial institutions like banks take time to implement changes of this magnitude. However, the ECB has shown that its testing phase is over and declared that CBDC will be launched by the end of the year,” he added.
CBDCs compete with Stablecoins
Many governments and central banks often cite financial inclusion or payment efficiency as reasons to launch their respective CBDCs. However, some experts believe that the real goal of these CBDCs is to counter the rise in decentralized cryptocurrencies such as Bitcoin (BTC).
In his written response to a question from Bitcoin.com News, Bar-Geffen points to attributes such as a fixed supply of tokens in circulation and a high level of decentralization that distinguishes CBDC from cryptocurrency. Nevertheless, he acknowledges that CBDC is likely to challenge the stupidity.
“CBDC is not designed to compete with it (cryptocurrencies like BTC). They may compete better with Stablecoins,” emphasized Bar-Geffen.
He downplays the possibility that CBDCS will be built for compilation with the Decentralized Financial (DEFI) protocol or Web3 ecosystem, suggesting that Stablecoins are likely to continue building a bridge between Fiat and Crypto Worlds.
The co-founder also rejects claims by some of the most vocal cryptocurrency advocates that governments employing the technology do so to manage the crypto industry.
With regard to the Africa Tokenization Council, which was recently launched by COTI, Bar-Geffen said it was to accelerate the adoption of blockchain in Africa and the Middle East by integrating regional authorities with global blockchain experts. He argues that this strategic collaboration is trying to streamline decision-making, secure funding and implement blockchain solutions quickly.
Meanwhile, Bar-Geffen suggested that the outlook that CBDC will be widely used in the years will depend on ongoing background work.
“Five years from now, CBDCs may be widely used in at least certain parts of the world. The risks and benefits they offer will depend heavily on the work currently being done by organizations like COTI.
