The world of Central Bank Digital Currencies (CBDCs) is quickly gaining traction. In May 2020, only 35 central banks around the world were exploring CBDCs, but now that number has risen to 114, representing 58% of all countries, which further generate 95% of global GDP.

Bank of America’s cryptocurrency analysts are bullish on the technology, claiming that digital currencies “appear inevitable.”

To that end, the team has released a research report analyzing the potential benefits and risks of CBDCs, both in their issuance and non-issuance.

The researchers point out the current financial system’s inefficiencies, such as the $4 trillion of capital that banks are required to deposit in corresponding banks in order to remove settlement risk.

This could be generating yield elsewhere, and it also prevents less capitalized banks and payment service providers from expanding into cross-border payments.

Moreover, the cost of cross-border payments is ten times more than domestic payments.

The report also investigates the potential of CBDCs to benefit the unbanked population, which is estimated to be 1.4 billion people worldwide. By developing a CBDC wallet to fulfill basic financial services such as being able to hold, send, and receive funds, as well