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The need to introduce central bank digital currency can not be overemphasized because it will play an important role in strengthening the cryptocurrency industry and win more approval for better acceptance in countries that dim bitcoin to be illegal ,that,s not all, the introduction of central bank digital currency will also help in faster, cheaper, and efficient payments transactions, also the central bank digital currency will also reduce the cost of producing physical money supported with the blockchain technology, and the central bank digital currency will be very difficult to counterfeit unlike the paper money. The central bank digital currency will also help in making it easier for government agencies to combat criminal activities, like money laundering, tax evasion, bribery because the money trail will be clearer.

There are various reasons why central bank digital currency needs to be introduced. First of all as a defensive move. The rise of crypto currencies like the Libra could create tensions among central banks and regulators as these can make it difficult for central banks to manage their foreign exchange controls and implement a sound monetary policy. Another reason is the optimisation perspective. Current central bank operated money systems work well, but could certainly benefit from improvements e.g. in settlement. They see this technology as ‘optimizing or improving the rough edges on a system which is already great, and which they have no desire to fundamentally change.

Decentrally governed CBDC will bring multiple advantages for an average consumer, including fast and cheap cross-border transactions, pseudonymity, personal data protection, and international operability. It will arguably eliminate the risk of hyperinflation because issuance will be automated via an algorithmic “issuance system.” All the transactions will be recorded on an immutable (supra) national ledger open to everybody, with no risk of double spending and reduced chance of illicit transactions.

The beauty of decentralization of digital currency is already fulfilled by cryptocurrencies. Of what use-case is the introduction of CBDC where the liberty in the use of money is vested with the states? On this, I believe that the vast move by the government of nations for the adoption of CBDC is to protect the interests of the state which central agenda is sovereignty and currency control. Going by the foregoing and considering the motive of the government that remotely tend to centrally control digital currencies at the detriment of the principles of the Proof of Work of the blockchain technology which mainly advocates for decentralized ledgers, I can validly draw conclusion that the introduction of CBDC without decentralized properties is an agenda to centralise and grant conditional right to privacy of data, security and limited access to currencies at the possession of the citizens, in the interest of the state. To this end, if the actual CBDC's implementation is not different as stated here, it should be seen as a needless proposal being introduced to cut ties of cryptocurrencies or weaken it.

The major incentive for consumers to adopt a central bank-issued cryptocurrency will be based on decentralized governance and open circulation system. Public trust in government and banking institutions has dropped since the financial crisis of 2008. Therefore, there is a room for digital currency that has no central authority in its usual central bank sense which determines e.g the borrowing rate or supply of money in circulation. In conclusion, only a proposed CBDC can bring out the beauty of decentralized governance either on a national or on a supranational level, across multiple jurisdictions possibly using different set of legal, monetary, fiscal policies, some of them automated, or required to be codified and put in place across nations.

Though both CBDCs and cryptocurrencies, to a varying degree, are based on blockchain technology, CBDCs are – fundamentally – different to cryptocurrencies. CBDCs are traditional money, but in digital form, issued and governed by a country’s central bank, whereas cryptocurrencies are decentralised. The Central Bank consensus is that decentralization is not a desirable property in a CBDC as it could aid tax avoidance and enable criminal payment systems. Cryptocurrencies are neither recognised as legal tender - which CBDCs, by definition, would be. And unlike central bank money, both traditional and digital, the value of cryptocurrencies is determined entirely by the market, and not influenced by factors such as monetary policy or trade surpluses

While central banks recognize digital money may be an improvement over physical money, a central bank designed digital currency will not resemble a decentralized cryptocurrency. Central banks think CBDCs could make payments systems more efficient, reducing transfer and settlement times and thus promoting economic growth. Other advantages could include making available efficient, secure and modern central bank money to everyone, and strengthening the resilience, availability and accessibility of retail payments. A widely adopted CBDC would allow better control of illicit payment and saving activities, money laundering, and terrorist financing. It would thus place users at less risk of violent crimes that target holders of cash, and potentially reduce security and insurance costs associated with keeping cash on business premises. CBDCs could provide significant competition for traditional monetary instruments and Improve overall effectiveness monetary policy. Next to that CBDCs could allow relaxing the so-called zero-lower bound constraint on nominal interest rates as negative interest rates can be applied to CBDC. CBDCs could also improve financial stability and macroeconomic stability and reduce so-called “moral hazard of banks“ by downscaling the role of the banking system in money creation via sight deposits, as CBDC would take over to large or full extent sight deposit issuance by banks. A CBDC could have profound implications for the banking sector, either positive or negative. CBDC can also make the financial system safer as. Under a central bank digital currency scheme, citizens and business would be permitted to open and hold interest paid accounts with the central bank. It would allow individuals, private sector companies, and non-bank financial institutions to settle directly in central bank money (rather than bank deposits). A CBDC, therefore, would compete directly with commercial bank deposits, likely inducing a partial shift of deposits away from commercial banks towards the central bank.

It is a contextual flaw to accept that the beauty of all digital currencies is decentralization. In the real sense of electronic money applications only cryptocurrencies use Blockchain and decentralized ledgers while any other digital currencies be it virtual or CBDCs are centrally controlled by design. Therefore, there is no need to introduce central bank digital currency with a misplaced Proof of Work or wrong consensus mechanism on decentralized ledger knowing that the beauty of its creation is centralization.

The key motives for issuing CBDC range from broadening financial inclusion to increasing the efficiency and stability of payment systems. A primary motivation for emerging market economies to consider issuing CBDC seems to be related to financial inclusion. An app-based CBDC that takes advantage of mobile technologies can increase access to financial services for the poor, rural households, and other segments of the population that may be underserved by the banking system. There are a number of ancillary benefits to a CBDC. Paper currency is vulnerable to counterfeiting. CBDCs could in principle reduce this risk, although the risk of electronic counterfeiting on an even more massive scale through hacking is a major concern for governments that intend to take this route. Another potential advantage of a CBDC is that it would discourage illicit activity and rein in the shadow economy by reducing the anonymity of transactions now provided by the use of currency banknotes, especially in the context of high-denomination banknotes. This would also affect tax revenues, both by bringing more activities out of the shadows and into the tax net and also by enhancing the government’s ability to collect tax revenues more efficiently. Ensuring compliance with anti-money laundering/combating financing of terrorism (AML/CFT) regulations has been a major challenge for government authorities. The elimination of physical cash could assist in these efforts, although the likely shifting of illicit fund transfers to decentralized payment systems and intermediated through anonymous, decentralized cryptocurrencies could vitiate this progress. This is one reason why central banks might seriously consider issuing CBDCs so they can retain control of or at least oversight over payment systems that could as easily be used for illicit as for licit purposes. These benefits come at the potential cost of loss of privacy in commercial transactions if these can be intermediated only through private or government-managed electronic payments systems. While various encryption technologies in principle allow users of retail CBDC to retain privacy, it is likely that these are subject to the same technological vulnerabilities as nonofficial cryptocurrencies, where privacy has been difficult to ensure.

The need to introduce central bank digital currency cannot be overemphasized. First, banks will have easier access to credit, meaning the money will move through channels faster. Cross-border transactions will require less documentation and time to settle. This will enable faster trade across the world and disempower monopolies. And traceability will allow nations to reduce criminal activities such as money laundering, tax evasion, and drug trafficking. Last but not least, the currency will be interoperable on a supranational level, meaning that emerging economies could suffer less from purchasing power inequality.