European Central Bank favours CBDCs over Bitcoin for cross-border payments

A recent study conducted by the European Central Bank (ECB) on identifying the best cross-border payment medium has crowned central bank digital currencies (CBDCs) as the winner against competitors, including banking, Bitcoin (BTC) and stablecoins, among others.

ECB’s serves as the central bank of the 19 European Union countries which have adopted the euro.

The study, “Towards The Holy Grail of Cross-border Payments,” referred to Bitcoin as the most prominent unbacked crypto asset.

EBC’s opinion of Bitcoin as a bad cross-border payment system boils down to the settlement mechanism of the highly volatile asset.

On the other hand, the ECB recognized CBDCs as a better fit for cross-border payments.

The ECB sided CBDCs owing to greater compatibility with forex exchange (FX) conversions. Two major advantages highlighted in this regard are the preservation of monetary sovereignty and the ease of instant payments via intermediaries such as central banks.