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Which Countries are Introducing Central Bank Digital Currencies?

Are we heading towards a cashless society as almost 100 countries are actively evaluating central bank digital currencies (CBDCs)?

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Digital currencies have been surging in popularity over the last few years as cryptocurrencies like Bitcoin have entered the mainstream.

This rise has also turned the heads of the world’s central banks as fears grow that domestic currencies could be undermined by their growth.

In response to these fears, central banks around the world have been investigating the practicalities of creating their own digital currencies.

What are Central Bank Digital Currencies?

A CBDC is essentially electronic cash. Like traditional fiat currencies, it gives holders a direct claim on the central bank and allows businesses and individuals to make electronic payments and transfers.

It cuts out the middlemen in financial transactions – primarily banks – and allows transactions to travel directly from person to person or customer to vendor.

This helps to eliminate risks to the consumer, such as the collapse of a commercial bank, and creates a direct connection between consumers and a central bank.

The growing popularity of crypto led central banks to fear losing control over the supply of money and payments systems. The spread of forms of payment not overseen by any central or public body could weaken central banks’ grip on the supply of money, and economic stability.

The idea of CBDCs comes from cryptocurrencies like Bitcoin or Ethereum. However, there are differences. Cryptos are unregulated and decentralized. They are volatile as their value is based on investors, usage and speculation. This volatility can be seen in the swings in value of Bitcoin over the last 12 months. CBDCs’ value is pegged to a country’s currency and they are designed to be more stable and secure.

Networked electronic resources are used by both crypto and CBDCs to create, track and validate transactions. However, many CBDCs have a central database controlled by a central bank which issues a unique serial number to each ‘e-coin’ issued as a way to identify it.

“The history of money is entering a new chapter,” said Kristalina Georgieva, IMF Managing Director, in an address to the Atlantic Council this week. “Countries are seeking to preserve key aspects of their traditional monetary and financial systems, while experimenting with new digital forms of money”.

Here’s a run down of the countries that have already rolled out their own digital currencies and some of those that are on the cusp of doing so.

Countries where CBDCs have been launched:

  • The Bahamas
  • Nigeria
  • Eastern Caribian Union

Countries that are testing CBDCs in pilot projects

  • Sweden
  • China
  • Jamaica
  • Ukraine

Countries where CBDCs are in development

  • India
  • Eurozone
  • USA

Source: euronews.com

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Retail SEE Grouphttp://www.retailsee.com
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