What is central bank digital currency?

CBDC is the digital mode of a country's legal currency. It is issued and supported by the central bank and has the same value as legal tender.

I and the enterprise can use the digital currency of the central bank to carry out mobile payment and transfer. They evaded the need for financing intermediaries and allowed the transaction to go from person to person and from customers to dealers.

What is the current situation of CBDC?

According to the PricewaterhouseCoopers CBDC global index in 2022, about 80% of the world's central banks are considering running CBDC, testing it in pilot projects, or have already used it.

Next, we will look at which countries are at various stages of the development of CBDC:

CBDC takes the lead in 2022

Sand coin

Sand coins are the numerical version of Bahamian coins. The Central Bank of the Bahamas released this report in October 2020 based on several authorized financial enterprises.

Samui is committed to providing more convenience and flexibility to the financial industry for more than 20% of the population of the archipelago countries that have difficulty in obtaining banking or financial services.

By July 2022, nine digital payment service providers have allowed them to distribute sand dollars to more than 400000 Bahamians living in more than 3000 islands, corals and islands.

DCash

Dcash is the digital version number of the Eastern Caribbean dollar issued by the Eastern Caribbean Central Bank of the intermediate loan currency management office of the organization of Eastern Caribbean States (OECs).

Antigua and Barbuda, Grenada, Dominica, Montserrat, Saint Lucia, Saint Kitts and Nevis, Saint Vincent and the Grenadines and Saint Kitts and Nevis have all adopted the Convention on biological diversity.

Dcash was launched in March 2021, and is committed to providing a more convenient, rapid and affordable way to pay for goods and services and transfer cash. And consumer enterprises need to apply for dcash. They must apply for registration or download the dcash application process for free in some financial institutions of the plan.

Earlier this year, the dcash platform terminated the service project because the security certificate in its hyperledger architecture expired. The termination will not affect all user information, but will terminate all transaction management.

Ennella

Enaira is a regulatory CBDC issued by the Central Bank of Nigeria. It was launched in October 2021, becoming the first CBDC in Africa and the third CBDC in the world after Sabi and dcash. Three months after its launch, the enaira speed wallet has been registered more than 70 thousand times. This wallet is used to store and browse CBDC.

As a kind of exchange medium and value storage, enaira is very similar to its legal provisions and its predecessor. It is suitable for non-contact payment and fund transfer in retail transactions. However, its application is not as common as expected. This is mainly because enaira must have smart machines. According to the data, only 20% of Nigeria's nearly 300 million people have smart machines.

Pilot projects that may be put into operation with all-round funds in 2022

Digital element

Digital RMB (e-cny) is a central bank savings certificate issued by the Central People's Bank. Although Samui, dcash and enaira occurred before, digital RMB is the first CBDC issued by one of the largest economies.

The loan currency was gradually tested in Beijing, Chengdu, Suzhou and Xi'an in April 2020. By the end of 2021, it is reported that in the increase experiment, the turnover of about 260 million consumers exceeded US $13.8 billion.

At the end of March 2022, the Central People's Bank announced that the RMB testing scope of electronic devices had been expanded to six other regions, including Guangzhou, Tianjin, Chongqing, Xiamen, Fuzhou and six major cities in Zhejiang Province where the 2022 Asian Games were held.

In addition to conventional products and services, initial users of digital blocks can also use these to purchase insurance policies and asset management products. The Chinese government also hopes to improve more test cases, such as culture and education, financial industry and medical care.

Applesauce index value

Jamaica digital trading center (jam DEX) is a kind of CBDC issued by Jamaican financial institutions. Jam DEX has been in the product test at the demonstration site since August 2021, and the scheme will be launched before the end of 2022.

With the amendment of Jamaica Commercial Bank Act 2020, the phased introduction of jam DEX was further promoted in June 2022. The amendment changes all "banknotes and coins" to "banknotes, coins and central bank digital currency", effectively making CBDC the legal currency of Jamaica.

In order to promote the rise of the Convention on biological diversity, the head of Jamaica's Finance Bureau and Social Services Department announced that the first batch of more than 100000 Jamaicans who created the jam DEX digital wallet would receive US $2500 from the government.

After reaching the CBDC wallet access threshold, the next stage of the pilot is undoubtedly to recruit third-party payment participants and sellers of various goods and services in the community market.

Developing CBDC

Figures (Rupees)

In February this year, Nirmala sitharaman, India's finance minister, mentioned that India's reserve financial institution (RBI) program gives rupees in digital form.

Ms. sitharaman said that India needs a number of rupees. Due to the number and quantity of cashless payments there and the economic policies of the host country, the host country cancelled the notes of 500 and 1000 rupees in its financial system in 2016.

RBI hopes to launch its CBDC from 2022 to 2023. The financial institution expects to launch digital rupees in stages. The key lies in the proof of concept, then the demonstration point, and then the comprehensive launch.

Digital Euro

Digital euro is an ongoing initiative of the European Central Bank (ECB), which is committed to issuing virtual euro. The initiative was launched in July last year as a two-year verification of the development potential of the euro filled CBDC.

Although the ECB did not indicate when it would decide to promote the project, Fabio Panetta, a member of the ECB's Implementation Committee, said that in his view, the digital euro could be launched within four years.

The timetable for the launch of digital euro has been pushed back and forth due to the fear of Russia's war in Ukraine and the rise of personal stable currencies such as Libra, whose Facebook has disappeared.

The European Central Bank will establish a digital euro, but payment service providers are expected to play a leading role in finding and identifying customers, issuing loan currency and providing special services.

In addition, according to Panetta, the highest use value of digital euro should be controlled at $160 million. This is mainly because people are worried that customers may have all their cash in digital form, thus depriving financial institutions of the assets they need to lend to themselves and enterprises.

result

The main task of CBDC is to promote financial industry tolerance, improve payment channels, improve payment efficiency, improve the resilience of payment platforms, and reduce illegal activities. Most central banks are also interested in sending banking services to regions with theout banking services.

In short, financial institutions are working hard to cut costs so as to better serve customers, especially under the premise of ambiguous economic development.

With more and more China entering the digital currency competition, no one knows who will undoubtedly be the big winner in 2022. But one thing is certain: the global financial layout has changed, and CBDC will continue to exist.