Monday, October 17, 2022
View ShowroomWill CBDC Impact the ATM Channel?
Central Bank Digital Currency (CBDC) conversations are popping up everywhere in the payments industry – which includes the ATM self service channel. For those not familiar with this type of a payment instrument, it bears some similarity to cryptocurrencies, such as Bitcoin, in that it is digital. However, it is a fiat currency, backed by the government, just as bank notes are.
The Federal Reserve released a white paper on this topic some months ago, elaborating on what they thought such a currency would “look like” here in the U.S. It may have raised more questions than it answered – such as whether or not commercial banks would be allowed to hold CBDC. And potential restrictions on converting it into cash or other digital currencies.
Many of the proponents of CBDC see it as a means of providing financial inclusion for the unbanked and underbanked, with free bank accounts to be issued by the Fed. Some might be receptive to that opportunity, but others simply don’t trust banks or the government.
Cross border payments is one application that could truly benefit from CBDC. But the picture for everything else is a lot murkier. Faster Payments advances have already made electronic payments a lot quicker and easier. And supporters of CBDC struggle to make a case for what benefits it would grant to the everyday consumer or business owner.
Should CBDC become a reality in the U.S. at some point, it will likely be a transaction option on your neighborhood ATM. As fiat currencies go, however, cash is still likely to be around for a very long time. And unlike all forms of electronic payments, it still works when the power goes out. When networks crash or disaster hits. Is easy to use. And your transaction is private.
If you are an ATMIA member and attending our annual conference in February, this topic will be discussed further at our Member Town Hall Meeting, just prior to the Opening Reception.
Best regards to all,
David
Feel free to reach ATMIA USA executive director David Tente by email at [email protected] or telephone +1.407.833.7906.