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Fran is CoinDesk TV's writer and reporter. He owns no crypto holdings.

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Join the most important conversation in crypto and Web3 taking place in Austin, Texas, April 26-28.

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.”

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Fran is CoinDesk TV's writer and reporter. He owns no crypto holdings.


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Fran is CoinDesk TV's writer and reporter. He owns no crypto holdings.