Brazil is set to take over the G20 Presidency in 2021, and one of the topics on the agenda is the potential benefits of central bank digital currencies (CBDCs). With the rise of digital payments and the increasing demand for digital assets, CBDCs are seen as a potential way to provide financial inclusion and stability.

CBDCs are digital versions of traditional fiat currencies, issued by central banks. They are designed to be used as a medium of exchange, store of value, and unit of account. Unlike cryptocurrencies, CBDCs are backed by a central authority, making them more secure and reliable.

The G20 has been exploring the potential benefits of CBDCs since 2019. During Brazil’s presidency, the G20 will continue to evaluate the potential benefits of CBDCs and how they can be used to promote financial inclusion and stability.

One potential benefit of CBDCs is that they could provide access to financial services to those who are currently excluded from the traditional banking system. This could include people in developing countries who lack access to traditional banking services, as well as those who are unbanked in developed countries.

In addition, CBDCs could provide a more secure and reliable way to store value. This could be especially beneficial for those in countries with unstable currencies or high inflation rates.

Finally, CBDCs could also help reduce the cost of transactions and increase the speed of payments. This could be particularly beneficial for small businesses and those in remote areas who often have difficulty accessing traditional banking services.

Overall, Brazil’s G20 Presidency is an important step in exploring the potential benefits of CBDCs. By evaluating the potential benefits and risks of CBDCs, the G20 can help ensure that these digital currencies are used responsibly and in a way that promotes financial inclusion and stability.