• Payments giant Western Union is collaborating with a $75 billion bank to study the effects of a US central bank digital currency (CBDC).
• The pilot study explored the potential benefits of utilizing CBDCs for cross-border remittances.
• However, earlier polls revealed that the majority of American citizens oppose a CBDC due to concerns about government oversight on their spending habits.
Payments Giant Collaborates With Bank On CBDC Pilot Study
Western Union and Philippines-based BDO Unibank are working together to explore how the implementation of a US central bank digital currency (CBDC), or a digital asset issued and backed by the Federal Reserve, would impact overseas remittances. The pilot study evaluated the potential benefits of utilizing CBDCs for cross-border remittances.
Potential Benefits Of Utilizing CBDCs
The Digital Dollar Project’s whitepaper highlighted several advantages of implementing a CBDC including reducing risk due to instant settlement across multiple currencies, optimized cost, and enhanced security and transparency. Kevin Mole, global head of digital assets at Western Union stated that through this pilot study Western Union has identified several advantages for customers and financial institutions which could potentially lay the groundwork for ongoing evaluations of the feasibility and viability of utilizing retail CBDCs for cross-border remittances.
American Citizens Oppose A CBDC
A survey earlier this year revealed that 74% of respondents would oppose a US central bank digital currency if it means that the government could control how they spend their money while 68% said they’d oppose it if it meant that the government could track how they spend their money. Furthermore, 59% of those surveyed said they’d opposed a CBDC if it would allow the state to freeze the bank accounts of American protesters. The research also found that only 16% of US adults support its issuance.
Western Union’s Pilot Study
Western Union’s pilot study explored how implementation of a US central bank digital currency (CBDC) would impact overseas remittances. Through this pilot study, Western Union identified several advantages for customers and financial institutions such as reducing risk due to instant settlement across multiple currencies, optimized cost, enhanced security & transparency etc., laying groundwork for future usage evaluations regarding retail CBDCs for cross-border payments.
Survey Results On American Citizens’ Opinion Of A CDBC
A survey conducted earlier in 2021 showed overwhelming opposition from American citizens towards CDBC implementation due to fears regarding government oversight on their spending habits; 74% were against CDBC if it meant state control over individual spending whereas 68% opposed tracking individual spending & 59% spoke out against freezing protesters’ accounts via CDBC implementation – with only 16% supporting its issuance in total.