No alternative to central bank digital currency

There is no alternative to a central bank digital currency (CBDC) as it will be very prominent in the global financial system in the coming decades, said Atiur Rahman, former governor of Bangladesh Bank, yesterday. 

"There will be further experimentation of the CBDC across the globe, which will establish it as an important solution to emerging needs and increasing digitalisation needs," he added.

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"Central bank-backed digital currencies will offer the general public broad access to digital money that is free from credit risk and liquidity waste. It will also significantly increase cross border trade," he said.

"The right path for us is to follow the CBDC-related development around the globe and learn as much as possible. Especially, learning from the neighbour is important as they have the same ecologies," he added.

He was speaking at a seminar titled "Transforming the Paper Currency to Digital: Takings from and Makings of Central Bank Digital Currency" organised by the Scholars Bangladesh Society and Emerging Credit Rating Ltd at Intercontinental Dhaka.

Bangladesh, as a rapidly digitalising country, having mobile financial service, agent banking and other fintech firms, should be also among the early starters of the CBDC, he added.

Central bank-backed digital currencies will offer the general public broad access to digital money that is free from credit risk and liquidity waste

Atiur Rahman Former BB governor

"No doubt there are many advantages of digital currency. Bangladesh will go ahead, will very slowly go on adopting the method of learning by doing," he said.

"I think the central bank, with their human resource and regulatory strength, will lead the process," he added.

Jamaluddin Ahmed, chairman of Emerging Credit Rating Ltd, said the adoption of mobile financial services by central banks has revolutionised financial transactions in the country.

Now it's time to explore the CBDC, he added.

"Currently, 122 countries around the world are on the path to adopting digital currency policies," he added.

"Digital currency will save our money and transactions will be more efficient. A task force consisting of banking experts and technical experts should be formed to introduce digital currency in the country," he added. Kamal Quadir, founder and CEO of bKash, said trust was at the core of financial transactions.

"Just as it is written on paper money that 'must be obliged to pay the bearer on demand', similarly even if the transaction is done digitally, the customer's trust must be gained," he said.

He said bKash has earned that trust.

It is because every transaction bKash makes is under central bank monitoring. Customers should be ensured security of money in digital transactions, he added.