Governments worldwide are rushing to develop central bank-backed digital currencies (CBDCs) as a direct response to the booming cryptocurrency market. This article will provide readers with an overview of recent developments in the CBDC sector.
China Leads the Way for CBDC Development and Adoption
China is well known for being the first country to show utter seriousness in the development of its CBDC - the Digital Yuan. At this point in time, core development is essentially concluded, as China has already started testing and early-phase adoption efforts. Multiple events have happened since our last coverage of China’s CBDC development.
Here are a few:
Ex-PBoC Governor states that China’s digital currency is not a threat to the global monetary ecosystem. However, the official believes that the Digital Yuan will play an important role in revolutionizing cross-border trade since the CBDC holds a fascinating ability to carry out foreign exchange transactions.
JD.com, a leading Chinese e-commerce company will begin accepting the Digital Yuan as a means of payment, following an official giveaway carried out in Suzhou. The giveaway was designed to work as a lottery, thereby rewarding lucky applications with 200 units of the digital yuan.
China works on improving CBDC usability by developing easy phone-based transfers.
Bank of Korea to Commence Virtual Environment Development of CBDC Next Year
During the recent Korea Blockchain Week, the Bank of Korea’s chief of digital currency research held a presentation regarding worldwide CBDC development efforts. According to him, CBDCs hold numerous monetary policy-related challenges that must be dealt with prior to any public release. Regarding Korea’s CBDC development efforts, the executive stated that the central bank has concluded the internal research and external consultation phases. The bank will likely start developing their CBDC within a virtual environment sometime next year.
Bank of France to Start CBDC Experiments
In a recent statement, the Deputy Governor for the Bank of France mentioned that the institution will soon carry out eight CBDC experiments. These actions will help the bank understand the technology’s potential, while providing valuable data on the outlook of the financial landscapes, exchange methods for CBDCs, and policies required to improve cross-border payments. In return, the data will help the bank assess any required regulatory adaptations, prior to the release of its CBDC.
Sweden Expects to Complete CBDC Review by November 2022
The Swedish government is launching a formal review that would focus on analyzing the transition to the e-krona, Sweden’s CBDC. As part of this formal review, Sweden will examine the particularities associated with migrating the nation’s monetary infrastructure to the e-krona. The main point of focus for Sweden is to ensure that the CBDC is safe and available to anyone.