Central Bank Digital Currencies (CBDC), being government-backed and centralised, hold the promise of modernising financial systems and bolstering financial inclusion. CBDC adoption is the future evolution of currencies in many countries.
CBDC is shaped by advancements in technology, changes in economic systems, and shifts in consumer behaviour. CBDC adoption is expected to continue growing.
Governments and central banks around the world are exploring and experimenting with CBDC as a means to enhance payment systems, financial inclusion, and monetary policy.
However, there are several downsides to CBDC adoption. Centralisation, privacy concerns, system vulnerabilities, impact on commercial banks, unbanked and underbanked inclusion are some issues.
Protecting oneself from a CBDC adoption involves being aware of potential risks and taking proactive measures to safeguard financial privacy and security.
While CBDCs are still in the development and implementation stages in various countries, here are some steps individuals can consider taking to protect themselves from CBDC adoption.
11 Steps you should take to protect yourself from a CBDC adoption
1. Educate yourself
Stay informed about the CBDC development in your country or region. Understand its features, benefits, and potential implications for your financial privacy and security.
2. Maintain traditional banking options
Keep a portion of your funds in traditional bank accounts. While CBDCs might offer benefits, having a diversified financial strategy can mitigate potential risks associated with digital currencies.
Crypto.com Visa Card: The only crypto card you need
Get up to 5% back on spending paid in crypto. No monthly, annual, or ATM withdrawal fees.
3. Secure digital devices
Use strong passwords and enable multi-factor authentication on all digital devices, including computers, smartphones, and tablets. Regularly update software and security patches to protect against cyber threats.
4. Use secure digital wallets
If CBDCs are accessible through digital wallets, choose reputable and secure wallet providers. Use hardware wallets or offline storage options for long-term storage of CBDC funds.
5. Be mindful of privacy settings
Be cautious about sharing personal information online, especially on platforms that deal with financial transactions or CBDC-related services.
6. Opt for anonymity features (if available)
If the CBDC offers privacy features, consider using them to protect your financial transactions from unnecessary scrutiny.
7. Diversify assets
Avoid putting all your wealth into a single currency or asset. Diversification can help protect against market volatility and risks associated with a particular currency.
8. Stay vigilant against scams
Be wary of phishing attempts, scams, or fraudulent schemes related to CBDCs. Be cautious of unsolicited messages and verify the authenticity of communications.
9. Advocate for financial privacy
Engage with policymakers and central banks to voice concerns about privacy and security issues related to CBDCs. Advocate for robust privacy protections and user rights.
10. Stay updated on regulations
Keep track of regulatory developments related to CBDCs in your country. Understand your rights and responsibilities as a user of digital currencies.
11. Seek professional advice
If you have concerns about the potential impact of CBDCs on your financial situation, seek advice from financial advisors or experts who can provide personalised guidance.
Specific measures to protect your assets from the CBDC adoption
Specific recommendations to protect one’s assets during and after a CBDC adoption are listed below. Diversifying your assets is a key strategy to reduce risk and protect your wealth from market volatility. Here are some specific recommendations to help you diversify effectively:
Crypto, Stocks & Beyond! The power of social investing
Trade and invest in a diversified portfolio, starting at $10, or practice risk-free with a virtual portfolio.
Get investment ideas from 30M users and invest in 3,000+ assets on a trusted and friendly platform.
1. Allocate across different asset classes
Consider spreading your investments across various asset classes, such as stocks, bonds, real estate, commodities, and cash equivalents. Different assets respond differently to market conditions, and diversifying across these classes can help balance your risk exposure.
2. Global market exposure
Don’t limit your investments to a single country or region. Invest in both domestic and international markets to take advantage of global opportunities and reduce exposure to country-specific risks.
3. Stocks and bonds
Within the equity portion of your portfolio, diversify across different industries, sectors, and company sizes (large-cap, mid-cap, and small-cap). Additionally, allocate a portion of your portfolio to government and corporate bonds for a more balanced risk profile.
4. Real estate investment
Consider investing in real estate properties or real estate investment trusts (REITs) to add a tangible asset to your portfolio and benefit from potential rental income and property appreciation.
Galaxy Z Flip5
Get a guaranteed £100 off when you trade in any smartphone in any condition*
Plus, we’ll double your storage to get 512GB for the price of 256GB*
5. Commodities
Including commodities like gold, silver, or oil in your portfolio can act as a hedge against inflation and currency fluctuations.
6. Cash reserves
Maintain an emergency fund or cash reserves equivalent to 3 to 6 months’ worth of living expenses. Having liquid cash on hand provides a safety net during unexpected financial challenges.
Galaxy Z Fold5
PC-like power. Now in your pocket.
Meet the phone with a big screen like a mobile movie theater. The one that’s both an exciting game console and a multi-screen, multitasking workhorse. And topped off with a powerful, pro-grade camera. All folded into your hands.
7. Investment vehicles
Utilise various investment vehicles, such as mutual funds, exchange-traded funds (ETFs), and index funds, to gain exposure to a diverse range of assets and markets.
8. Rebalance regularly
Periodically review and rebalance your portfolio to ensure it stays aligned with your risk tolerance and investment goals. Rebalancing involves selling overperforming assets and buying underperforming ones to maintain your desired asset allocation.
Get the legal help you need, with our DIY services or attorney advice. Either way, we’ve got your back.
9. Consider professional advice
If you’re unsure about how to diversify effectively or need assistance with asset allocation, consider seeking advice from a qualified financial advisor or investment professional.
10. Long-term perspective
Keep a long-term perspective when investing. Diversification helps to smooth out short-term market fluctuations and is particularly valuable for investors with a focus on long-term financial goals.
Crypto.com Metal Visa Cards
Available Card Tiers: Obsidian, Frosted Rose Gold, Icy White, Royal Indigo, Jade Green, Ruby Steel and Midnight Blue.
5% Cash back
Conclusion
Remember that diversification does not eliminate all investment risks, but it can help minimise the impact of volatility and provide a more stable financial foundation. Your investment strategy should align with your individual risk tolerance, financial goals, and time horizon. Regularly review and adjust your portfolio as needed to ensure it remains aligned with your changing circumstances and investment objectives.
_______________________________
Every month in 2024 we will be giving away one PlayStation 5 Pro. To qualify join our Facebook group, TikTok and Subscribe to our Sweet TnT Magazine YouTube channel
When you buy something through our retail links, we may earn commission and the retailer may receive certain auditable data for accounting purposes.
- From Brooklyn to Port-of-Spain: How to experience the best of both worlds
- How to become an online meditation guide
- The future of Singapore’s economy: Predictions based on past fiscal successes
- 5 Luxurious resorts in Trinidad and Tobago for New Yorkers craving a tropical escape
- Boost your business with wholesale tea and coffee on B2B marketplace
You may also like:
The rise of online banking and how it changed the world
MTN: Mastercard to scale and secure blockchain technology
Crypto wallet security: Tips to keep your digital assets safe from hackers
Crypto exchange hacks and how to protect your assets
Millionero: A user-friendly crypto exchange for beginners
Crypto investing for retirement: Is it a viable option?
Mastercard Crypto Credential brings more trust to the blockchain ecosystem
A whole investment firm of one.
Investing doesn’t have to be that hard.
Access stocks, ETFs, and more. Oh, and no commission fees. That’s right. Zero. Nada. Zilch. Your first stock is even on us.
*Conditions apply