Businesses to significantly benefit from digital currency transactionsWednesday, July 28, 2021
As digital currencies shape up to become the preferred legal tender in the next few years, at least one digital expert has said that businesses are going to benefit from transactions done through these technologies.
Speaking at a recent webinar held in partnership with the Private Sector Organisation of Jamaica (PSOJ), consultant and digital expert at information technology (IT) and security firm Symptai Consulting, Claston Brown, said that with the supporting technologies behind digital currencies, businesses are to benefit from greater efficiencies and safer transactions. These transactions are also to be settled in real time allowing for more convenience and eliminating the need to process and store large volumes of physical cash.
“Previously for businesses to make payments they would have to write a cheque or ask the bank, now with a central bank digital currency (CDBC) all they need to ask for is a wallet address to send the transaction,” he said.
Brown said that with these currencies fast becoming mainstream, more businesses should seek to undertake the requisite assessments as they prepare for the digital transition and to counter privacy issues.
“If you are planning to conduct these transactions or hold CBDCs at your business, it's imperative that investments are made towards improving IT infrastructures and probing your security posture. This means conducting audits, doing penetration testing and security assessments to understand where the loopholes are so as to implement controls to mitigate risks,” he said.
The Bank of Jamaica (BOJ) recently indicated its intention to pilot the use of a CBDC come next month, after which a full roll-out is expected to begin next year.
Echoing similar sentiments of the central bank which said that it was expecting digital currency dominance by the next ten years, Brown conceded that the use of cash will become less as the CBDC technology evolves.
“Based on how the currency is evolving, it will be less convenient to conduct transactions with cash,” he stated also pointing to a growing use of digital payment solutions especially since the novel coronavirus pandemic.
Outling some other main advantages of using digital currencies, the digital consultant said that they offered more protection and unlike cash, remains the same in value amid financial institution collapse. They also reduce liabilities on deposit since it is cheaper to store.
Brown further noted that with lower levels of risk involved in keeping these currencies, there was no need for insurance protection. Currently, cash at the bank is protected under a deposit insurance scheme which provides coverage of up to 1.2 million per depositor.
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