Both Sides of the Digital Coin

Opportunities and Challenges for Treasurers

The digital currency universe has expanded dramatically over the last decade and the underlying digital ledger technology (DLT) is being leveraged for a range of payment initiatives, not least the development of central bank digital currencies (CBDCs). Here, specialists from NatWest explain why these innovations are potentially game-changing for institutions and treasurers alike, highlighting the profound impact CBDCs could have on their operations. 

It was just 13 years ago in 2010 that Bitcoin notched up its first material transaction: two pizzas bought by a Florida-based programmer Laszlo Hanyecz for 10,000 Bitcoin, the equivalent of £25 at the time.

Such early, real-world transactions helped fuel hopes among ardent digital currency enthusiasts that Bitcoin would rapidly evolve into a decentralised peer-to-peer (P2P) means of transferring value and compete against Visa and Mastercard and, more generally, give the banks a run for their money.

While that ambition remains largely unfulfilled, Lee McNabb, Head of Payment Strategy and Research, NatWest, says that Bitcoin has been phenomenally successful in spawning thousands of imitators that now comprise the cryptocurrency space. At the same time, he observes, it has also become a highly volatile speculative store of value.

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