The lure of digital cash, but do you know what you are buying?

There has been much reading matter written about the benefits of stablecoins and central bank digital currencies (CBDCs). Almost every blockchain conference panel arduously debates the pros and cons about how digital cash offers the potential to revolutionise wholesale banking (including cross broader payments) and how it provides a new tool for governments to tackle the challenges of the informal economy. As reported by the IMF, this economy, on average, “represents 35 percent of GDP in low- and middle- income countries versus 15 percent in advanced economies”. Furthermore, the International Labour Organisation estimates that “about 2 billion workers, or over 60 percent of the world’s adult labour force, operate in the informal sector - at least part time”. Then there is the argument that stablecoins will help to make financial markets more inclusive, given that there are over 1.2 million people in the UK of which are unbanked and over 1.4 billion unbanked globally. Yet many have acc…