Many people began talking about using central bank digital currency (CBDC). Every business moves toward paperless. Why not replace the current paper legal tender by digital currency?

The issue looks attractive, but the topic needs extensive research before issuing CBDC.

At the DECONOMY forum in Seoul Friday, IBM chief technology officer Stanley Yong, Canadian central bank chief economist Francisco Rivadeneyra, R3 research fellow Antony Lewis and University of Chicago professor Gina Pieters shared their views about introducing the CBDC.

Their consensus was that countries need extensive research on CBDC before introducing the digital currency.

First of all, they said developing and developed countries have different views on CBDC.

Developed countries see CBDC as a method of the settlement because the digital currency is easy and efficient to use.

However, IBM Chief Technology Officer on blockchain Stanley Yong said developing countries see CBDC as a way of establishing the digital financial infrastructure.

“Many developing countries have an underdeveloped and unstable financial network for credit card usage and online transactions,”  he said.

On the other hand, industrialized countries favor CBDC as a way of upgrading the financial settlement system and monetary policies as well as preventing financial crimes, according to Canadian central bank chief economist Francisco Rivadeneyra.

University of Chicago Gina Pieters said CBDC would create another type of the alienated class. People only using cash would be alienated, he said.

“Sweden has been reducing cash-based transactions while Kenya has been introducing mobile-based financial transactions,”  the professor said, “Under this trend toward a cashless society, people using only cash are alienated.”

The Canadian economist said what is essential is to ensure that the economy would function well in the CBDC-based society. He said in-depth and extensive research is necessary for the CBDC-based economy.

R3 research fellow Antony Lewis said what is critical is how to define the CBDC.

The next critical issue is whether the government agencies could monitor all CBDC financial transactions, according to the University of Chicago professor. Privacy and confidentiality of individual transactions are quite critical

The panelists agreed that introducing CBDC is not so difficult technically, but added that each country must discuss whether the digital currency is socially acceptable, economically attractive.