Digital asset revolution and the impact on payments

Written by Paul Staples at ClearBank

The emergence of digital assets (that can be used as a form of payment by transferring value) challenges the dominance of cash which itself is typically backed by debt from a government and a promise to pay.   

Central bank digital currencies (CBDCs) and digital assets are challenging traditional ways in which goods and services are paid for, in effect, thus creating a digital revolution. This raises the question of what roles will traditional financial institutions such as banks and credit/debit card providers play in this evolving landscape? State Street’s report on tokenization and regulation highlights the potential of digital assets, emphasizing the need for frameworks that strike a balance between encouraging innovation and safeguarding investor protection - something we must take seriously since banking is ultimately built on the principle of trust. Furthermore, it underscores that a regulated environment can unlock the potential of digital assets by offering a secure and transp…