📋 Group Discussion (GD) Analysis Guide

💻 Should Countries Adopt a Shared Digital Currency to Facilitate Global Trade?

📝 Introduction

🌐 Opening Context

In a rapidly globalizing world, digital currencies offer transformative potential for international trade by reducing transaction costs and facilitating faster cross-border payments.

📜 Topic Background

The rise of cryptocurrencies like Bitcoin and stablecoins such as USDT has ignited debates about the feasibility of a shared global digital currency. Institutions like the IMF and the Bank for International Settlements have explored frameworks for digital currencies, underlining their potential to standardize and streamline global trade.

📊 Quick Facts and Key Statistics

• 💰 Global Cryptocurrency Market Value (2024): $1.6 trillion, showcasing the growing adoption of digital assets.
• 💳 Cross-Border Payment Fees: Average of 6.3%, which a shared currency could reduce significantly.
• 🏦 CBDC Rollouts: 11 countries have launched Central Bank Digital Currencies (CBDCs).
• 🌍 Trade Impact: Digital currencies can save $120 billion annually in cross-border transaction fees.

🤝 Stakeholders and Their Roles

• 🏛️ Governments and Central Banks: Establish regulatory frameworks and issue digital currencies.
• 💼 Private Corporations: Develop supporting technology and infrastructure.
• 🌐 International Organizations (IMF, BIS): Provide governance frameworks for interoperability.
• 👥 Consumers and Merchants: Benefit from seamless and cost-effective transactions.

🏆 Achievements and Challenges

✨ Achievements

• ✅ Financial Inclusion: CBDCs could extend services to 1.7 billion unbanked individuals worldwide.
• ✅ Reduced Costs: Digital currencies minimize reliance on intermediaries, saving billions annually.
• ✅ Real-Time Settlements: Facilitates instant cross-border trade settlements.
• ✅ Adoption of Blockchain: Enhances transparency and security in global transactions.

⚠️ Challenges

• ❌ Regulatory Frameworks: Lack of global consensus on regulations.
• ❌ Cybersecurity Risks: Vulnerability to hacks and fraud.
• ❌ Currency Volatility: Potential instability in value due to market dynamics.

🌍 Global Comparisons

• 🇨🇳 China’s Digital Yuan: Accelerated cross-border trade but faces concerns over surveillance.
• 🇪🇺 Eurozone’s Digital Euro: Focused on regional interoperability within EU nations.

📖 Case Studies

• 🏝️ The Bahamas’ “Sand Dollar”: Enabled inclusive trade through innovative digital currency solutions.

💡 Structured Arguments for Discussion

• ✅ Supporting Stance: “A shared digital currency would streamline global trade, saving billions and boosting economic efficiency.”
• 🛑 Opposing Stance: “The risks of cybercrime and lack of trust between nations make such a currency unfeasible.”
• ⚖️ Balanced Perspective: “While a shared digital currency offers immense potential, its success hinges on robust regulations and global cooperation.”

🎯 Effective Discussion Approaches

• 📊 Opening Approaches:
  • Begin with the significance of rising cross-border payment fees.
  • Reference successful CBDC implementations like the Digital Yuan.
  • Highlight the inefficiencies in current SWIFT-based transactions.
• ⚡ Counter-Argument Handling:
  • Emphasize technological solutions to cyber risks.
  • Present international agreements as a pathway to trust-building.

🧠 Strategic Analysis (SWOT)

🏫 Connecting with B-School Applications

📚 Real-World Applications

• Exploring trade efficiency projects in operations management.

🎓 Sample Questions

• ❓ “How could a shared currency affect global GDP growth?”
• ❓ “What are the implications for small economies?”

📘 Insights for Students

• 💡 Focus on data privacy, cross-border regulatory frameworks, and fintech innovations.