Over the last two decades, the world has witnessed a stark shift towards more digitalized assets. From retail money to holding huge lumpsum amounts, the digital finance arena is present everywhere. The latest and seemingly persistent change is the revolutionary blockchain technology – including digital market assets like State-backed Central Bank Digital Currencies (SBDC) and stable coins.
A report by EY (Ernst and Young) – an esteemed member of the global big four – suggests banks prepare for this change. There is a gap in the current financial systems and the foreseen future financial systems. This gap needs to be filled through required policy change – for all the banks.
The central bank is moving ahead in this domain of digital assets, and state banks, including private players, need to boost their speed. With digital assets and advanced blockchain applications, investors will flock towards the central bank.
For relevancy, all the banks need to incorporate the future in the present. There is a need for banks to overlook the role of cryptocurrency and other digital assets in their businesses and corresponding clients. A policy change or a demo policy for the incorporation of digitalization in these areas is crucial. This will mark the initiation of a more digital and modern banking journey – which is the undeniable need of the moment.
Another reason for such a heavy push is to spare margins for errors. It is not a black-and-white shift to digital assets. There are many factors at play, and unprecedented changes to encounter. Likewise, an early start with more precautions and knowledge will be a great start for the banks – as encouraged by EY.