CBDCs’ Current Standing Worldwide
As per records, roughly 90% of the nations worldwide, summing up to eighty-seven countries, accept and experiment with CBDCs (Central bank digital currencies). About nine countries have gone all out with their digital currencies, as fourteen others are going through pilot currency tests. Now, where are they dropping these CBDCs? What are they referring to when they stake on a future of money? Let’s find out;
Central bank digital currencies are basically a digital form of money issued by the government-appointed by the country. Although it might seem similar to Bitcoin or any other cryptocurrency, CBDCs are centralized currencies, legal tender generated and governed by the central authority or bank. But like other cryptocurrencies, centralized digital currencies are useful for swift, affordable, and real-time transactions globally.
The pandemic has multiplied the number of countries adopting CBDCs by twofold. Moreover, with crypto’s speedy progress and Covid-19 exhibiting new ways to use digital money, CBDC’s research funding climbed, from undertaking contact-free transactions to allocating stimulus funding.
Five nations huddled up in the Caribbean rolled out CBDCs, comprising Antigua and Barbuda, the Bahamas, Saint Lucia, Saint Kitts and Nevis, and Grenada. The fourteen countries that have been actively testing pilot digital currencies include China, South Korea, Sweden, and more.
China has been determined to be the first nation to launch its central digital currency fully. Although their digital currency yuan remains in the pilot stage, it is currently being utilized for daily supplies, meals, transportation, and other national sectors.
Additionally, tourists visiting China will conveniently be able to make transactions via digital yuan, even if they haven’t opened a bank account in China. However, there is still some ambiguity about when these features will come into action. In the light of privacy infringements, certain lawmakers in the United States have been criticizing and abstaining from using digital currency through the Beijing Winter Olympics 2022.
The United States’ digital dollar has also been under development. Two of their preliminary models are set for the reveal, one administered by Boston’s Federal Reserve Bank and another by the Digital Currency Initiative by MIT. Experts sense some hesitancy around the works of CBDC in the United States. Vital matters relating to its offline usage, user privacy, and distribution have made it to the top of the list. Specialists observe that, “If we bring in the digital dollar, we need to prioritize privacy and that it would play a fundamental role.”
Why are CBDCs the buzz?
CBDCs are closely portrayed as competing campaigns boiling up between China V/s US or the never-ending CBDCs V/s Cryptos. On the contrary, some specialists can see Cryptocurrency and CBDCs go hand-in-hand as vital components of the financial system that has been marching towards a cash-free approach. Few experts vouch that “CBDCs and Cryptocurrencies will have individual uses and coexist marvelously.” So what’s the ultimate take? The technology and innovation that CBDCs and Cryptos come with could drive the whole financial system towards a prompt, extensively- innovative, and unbiased stance.