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Today, we’re on the precipice of what could be the largest transformational period in global history. With the first Industrial Revolution, new technologies like assembly lines, factories and transportation fundamentally changed society. This time, instead of cogwheels doing the work, blockchain-based digitalization will continue to drive transactions. Specifically, this latest phase of progress has its sights set on a massive industry ripe for disruption: finance.
Digital finance and the monetary system is leveraging decentralized blockchain technology to modernize financial markets. Dominant players in these systems include the world’s biggest financial institutions and global central banks.
The rise of digital currencies and CBDCs
As tokenization is an inevitable trend, central bank digital currencies (CBDC) are surging in adoption, since they are simply one kind of a more generalized digital asset, albeit one that is bound to risk-free central bank money. The global rivalry in digital currencies is heating up as central banks from an increasingly wider swath of countries, including China, Hong Kong, Thailand, the EU, U.K., U.S., and Australia, explore potential use cases for tokenized money.
CBDC is the first place where we see top-down adoption of distributed ledger technology (DLT) from central banks and governments. The adoption of CBDCs will drive significant DLT ecosystem innovation and development that will impact financial organizations. The widespread adoption of DLT will extend beyond finance to other industry verticals like security, supply chains, healthcare, retail and ecommerce.