CBDCs Are the Future of Money, IBM Exec Says

Shyam Nagarajan says issuers should consider a hybrid model of permissioned and permissionless currency.

AccessTimeIconJan 17, 2023 at 6:44 p.m. UTC
Updated May 9, 2023 at 4:06 a.m. UTC

Central bank digital currencies (CBDCs) have the potential to change payment systems, Shyam Nagarajan, an executive partner at IBM Consulting, said Monday on CoinDesk TV’s “First Mover” from the World Economic Forum's annual conference in Davos, Switzerland.

Nagarajan said that CBDCs are the future of money, but issuers need to consider a hybrid-like model.

“They are replacing the current digital currency system, and in a way, they are controlled,” Nagarajan said. “This is an excellent position where a combination of permissioned and permissionless is necessary.”

While many CBDC pilot projects are still in a development phases, Nagarajan said payments will eventually be made with CBDCs. In the meantime, stablecoins, which are a form of cryptocurrency pegged to real-world assets such as gold or the U.S. dollar, are working as “stopgaps until CBDCS are available in the market.”

Rob Massey, global tax leader, blockchain and cryptocurrency at Deloitte, echoed Nagarajan's comments in a separate segment on “First Mover.” He said the ability to use programmable money with smart contracts can reduce friction and “help large-scale enterprises elevate their level of transparency and real-time payment systems.”

“It’s absolutely where we’re going,” Massey said, although he cautioned that not all CBDCs, stablecoins and smart-contract protocols “are created equal.”


Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

Fran Velasquez

Fran is CoinDesk's TV writer and reporter.