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Blockchain, CBDC, Digital Currency, Featured

A Brief Guide On Central Bank Digital Currencies

The economic and political rationale concerning the issuance of Central Bank digital currencies can vary notably as per jurisdiction. Declining a global pandemic, cash usage along with the desire to manage with additional Central banks accelerated Central Bank Digital Currency research in Nations that earlier had no strong stance on Central Bank digital currencies before a year.

Apart from that, some Central Bank digital currencies failed to gain traction due to minimal trust in the government. Other than that, people have also witnessed the Central Bank Digital Currency being implemented and researched for combating inflation. Concerning the situation, numerous nations are eyeing Central Bank digital currencies for skirting sanctions or manage from additional countries.

Also Read: Controlled Blockchain for Enhanced Security in CBDC: HashCash

Countries sanctioned by the United States, including Cuba and Iran, happen to be devoting notable technical resources for developing their own Central Bank Digital Currencies. On the other hand, Palestine aims to issue a Central Bank Digital Currency for circumventing Israel’s control. Along the same lines, the Lebanese government is claiming that the profound ties between the government and the bank lead to low public trust, thereby leading to an approximated $10000000 stored in homes rather than banks.

A Lebanese CBDC developed upon transparency would likely restore confidence within the banking sector. It happens to be one of the central purposes of Central Bank Digital Currency – to assure confidence in the monetary system. Here is an updated list of banks that are in development, currently researching, have launched, or have canceled their CBDC projects.

10 Countries Working On Projects Related to Central Bank Digital Currencies

Here is a list of the ten countries working on central bank digital currencies:

Bahamas

During 2017, the central bank of Bahamas came forward with the sand dollar, Central Bank Digital Currency, looking forward to streamlining and modernizing the financial system of the country, thereby reducing service delivery charges and enhancing transactional efficiency, hence improving financial inclusion.

The sand dollar happens to be supporting 1:1 to the Bahamian dollar. This, in turn, remains pegged to the United States dollar. After a successful pilot launch on the Island conglomeration concerning Exuma, the sand dollar turned out to become the first-ever CBDC in the world, thereby successfully transitioning beyond the pilot stage, hence achieving its official launch in October last year. Later, the central bank announced that the sand dollar happens to be expected to attain full interoperability within its numerous wallet providers within a week, as of March 26, 2021.

Australia

Lately, the Reserve Bank announced a collaboration between the National Australia Bank and the Commonwealth Bank for a partnership project for exploring the possible implications and use of a wholesale Central Bank Digital Currency.

Bermuda

In 2018, the Government of Bermuda developed a comprehensive cryptocurrency framework and operated quietly towards a possible pilot program. In February 2021, the government started the Bermuda dollar pilot test. Supporting the pilot project, a famous company announced that they would be accepting digital Bermuda dollars.

Bahrain

Bahrain’s Central Bank shifted from the initial stages of analyzing a central bank digital currency in 2018 to carry out research on the potential chances of launching the online version of its currency – the Bahraini Dinar. During the initial phases of 2020, the central bank of Bahrain announced that they would pilot the central bank digital currency policy-maker tool kit created by the world economic forum, as a part of the governor’s research on the influence of digital currencies on the economy.

Eswatini

Eswatini can be referred to as a landlocked nation in South Africa, earlier named Swaziland. In 2019, Eswatini’s Central Bank carried out A4 face diagnostic research for investigating possible use cases concerning a central bank digital currency implementation.

Estonia

The e-residency program of Estonia allows nationals from abroad to apply for Estonian Digital ID, thereby gaining Digital service access. It is done to research how suitable the core technology is.

France

In December 2020, the Bank of France experimented with CBDC successfully. In July 2020, the bank of France has chosen eight applicants for experimenting with a digital Madre concerning interbank settlements.

Also Read: Consulting and Advisory Services for CBDCs Offered by HashCash

Japan

In October 2020 the bank of Japan announced its approach to Central Bank digital currency. It revealed that it is likely to launch a central bank digital currency feasibility study in April 2021.

Indonesia

In 2021, the bank of Indonesia is concentrating on the idea of developing a rupiah-denominated digital currency matching with the Global Trend. However, the observers and stakeholders of Indonesia have stated to the Jakarta Post that this plan has a long way to go apart from its possible advantages.

Kenya

The central bank of Kenya, in October 2020, discussed with additional Global Central banks the potential of entering the CBDC space.

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