📋 Group Discussion Analysis Guide

💬 Topic: Can Digital Currencies Replace Traditional Banking Systems?

🌐 Introduction

Opening Context: Digital currencies like Bitcoin and CBDCs (Central Bank Digital Currencies) have sparked debates on their potential to revolutionize global financial systems, offering efficiency but raising concerns about economic stability.

Background: Originating with Bitcoin in 2009, digital currencies were designed to bypass traditional banking. With governments worldwide exploring CBDCs, their potential to complement or disrupt traditional systems has grown.

📊 Quick Facts and Key Statistics

• Bitcoin Market Cap: Over $500 billion (2024) – Reflects its global adoption and financial influence.
• CBDC Initiatives: 130+ countries exploring or piloting CBDCs (IMF, 2024).
• Unbanked Population: 1.4 billion globally – Opportunity for digital currencies to enhance financial inclusion.
• Transaction Speed: Bitcoin (10-60 minutes) vs UPI (~5 seconds).

🔗 Stakeholders and Their Roles

• Governments: Regulating and introducing CBDCs to retain monetary control.
• Private Companies: Driving innovation in blockchain technology.
• Citizens: Adopting cryptocurrencies for personal transactions and savings.
• Banks: Adapting to digital competition by modernizing their services.

📈 Achievements and Challenges

✅ Achievements

• Global Adoption: Over 400 million cryptocurrency users globally (2024).
• Decentralization Benefits: Eliminates intermediaries, reducing transaction costs.
• CBDC Progress: Pilot projects in China (e-CNY) and the Bahamas (Sand Dollar).

⚠️ Challenges

• Volatility: Bitcoin price fluctuates significantly, reducing its reliability as a currency.
• Security Concerns: Hacks in crypto exchanges have caused losses worth billions.
• Regulatory Uncertainty: Differing legal stances globally complicate adoption.

🌍 Global Comparisons

• Estonia: Advanced in e-governance but cautious about crypto.
• El Salvador: Adopted Bitcoin as legal tender but faced integration issues.

📜 Structured Arguments for Discussion

• Supporting Stance: Digital currencies are faster, decentralized, and promote financial inclusion.
• Opposing Stance: Their volatility, security risks, and regulatory gaps hinder large-scale adoption.
• Balanced Perspective: Both systems can coexist, leveraging each other’s strengths for inclusivity.

💡 Effective Discussion Approaches

• Opening Approaches:
• “Bitcoin’s $500 billion market cap highlights its growing role, yet 1.4 billion people remain unbanked globally.”
• “The success of CBDCs like e-CNY raises questions about the future of traditional banks.”
• Counter-Argument Handling:
• “While volatility exists, stablecoins are designed to mitigate this issue.”
• “Banks remain vital, but digital currencies can enhance their services through blockchain.”

🔍 Strategic Analysis (SWOT)

• Strengths: Speed, decentralization, financial inclusion.
• Weaknesses: Volatility, regulatory uncertainty.
• Opportunities: Integration with traditional banking, stablecoins.
• Threats: Cybersecurity risks, government crackdowns.

📚 Connecting with B-School Applications

• Real-World Applications: Topics in FinTech innovation, blockchain integration in banking.
• Sample Questions:
• “How can CBDCs enhance monetary policy effectiveness?”
• “Discuss the role of cryptocurrencies in financial inclusion.”
• Insights for Students: Learn blockchain technology, analyze case studies like El Salvador’s Bitcoin adoption.