Bank of America (BOA)’s global research team published a report on global cryptocurrencies, digital assets, and central bank digital currencies (CBDCs) earlier this week. The bank wrote: Digital currencies appear inevitable. We view distributed ledgers and digital currencies, such as CBDCs and stablecoins, as a natural evolution of today’s monetary and payment systems.

“Our view is CBDCs that leverage distributed ledger technology have the potential to revolutionize global financial systems and may be the most significant technological advancement in the history of money,” BOA described.

The report explains that there are currently 114 central banks exploring CBDCs, representing 58% of countries globally and over 95% of global GDP. It also notes that central bank digital currencies “do not change the definition of money, but will likely change how and when value is transferred over the next 15 years.”

According to Bank of America, “CBDC issuances by central banks appear inevitable for three reasons.” Firstly, they “may increase efficiencies for cross-border and domestic payments and transfers.” In addition, they “may decrease central banks’ risk of losing monetary control” and “increase financial inclusion.”

However, central banks could mitigate this risk by introducing CBDC holding limits, either on a temporary or permanent basis.