TronWeekly

Crypto World News

You are here: Home / Archives for CBDC

CBDC

Ecuador’s Presidential Candidate Wants To Issue National Crypto Backed By Gold

by

Despite being out and about in the financial world, cryptocurrencies have had a hard time being recognized by government officials. Ecuador, however, seems to be more hostile than in other countries. Over the years. Ecuador has been vocal about its resentment towards crypto. A presidential candidate was seen yearning for a national crypto asset.

Ecuador To Get A National Cryptocurrency?

While the citizens of Ecuador have been prepping for the 2021 general election, presidential candidate, Geovanni Andrade was seen sprucing up the financial scene in the country. The Ecuadorian-Chilean Chamber of Mining who is running to be President of the country appeared in a recent interview pointing out the need for a national virtual currency.

With this, Andrade hopes to carry out transactions within the country in a much easier manner. He hopes to peg Ecuador’s national crypto-asset with gold. He added,

“We are looking at ways to create an Ecuadorian cryptocurrency, this does not mean that we are going to escape from dollarization—we must support dollarization.”

This further affirmed that this potential national currency would be an alternative mode of transaction and would not replace the dollar or the country’s national currency. Andrade revealed that this asset could pose extremely beneficial for the country.

Central bank-issued digital currencies have been making the rounds now. Countries across the globe have been working with their respective central banks to roll out cryptocurrency like assets. While China has been spearheading the whole movement, other countries are jumping onto the bandwagon. These assets have been speculated to cause trouble to the hold that fiat currencies and cryptocurrencies have already established.

Canada’s Former Prime Minister, Stephen Harper, in a recent interview revealed that CBDC’s were inevitable. The ever-growing fast-paced financial world would force CBDCs out of every country. However, dealing with regulatory hurdles would be a given for these assets, he suggested.

Ukraine Eyes Development Of CBDC As It Teams Up With Stellar Foundation

by

Central Bank Digital Currencies [CBDC] has become every country’s dive into digitalization. Ukraine seems to be jumping on the bandwagon as several countries have already begun developing their own digital currencies. Governments have taken advice from prominent crypto platforms in the development of these assets. Ukraine’s Ministry of Digital Transformation recently revealed its partnership with a  prominent cryptocurrency network.

Ukraine To Embrace Digitalization

In a recent blog post, the Stellar Development Foundation [SDF] unveiled that it had signed a Memorandum of Understanding and Cooperation with Ukraine’s Ministry of Digital Transformation. This memorandum is said to focus on the development of digital assets in the country. With China being well ahead in the CBDC game, other countries were also seen catching up. Ukraine seems to be complying with the “better late than never” motto and is prepping to embrace digitalization. The post pointed out that the country wanted to elevate its status in Eastern Europe’s digital financial market.

While it remains uncertain if the country will opt for Stellar’s blockchain for its CBDC, the memorandum affirmed that both the parties would focus on several other aspects of rolling out a digital currency. This included the development process of the virtual asset, all the way to the implementation, circulation as well as the regulation procedures of the asset.

The Deputy Minister of Digital Transformation for IT Development, Oleksandr Bornyakov pointed out that the leading countries of the world were on board with the development of digital assets and Ukraine’s National Bank has reportedly been researching the prospects of CBDC since 2017. He added,

“The Ministry of Digital Transformation is working on creating the legal environment for the development of virtual assets in Ukraine. We believe our cooperation with the Stellar Development Foundation will contribute to development of the virtual asset industry and its integration into the global financial ecosystem.”

All the activities related to the development of Ukraine’s CBDC has started this month. Additionally, the CEO and Executive Director, Stellar Development Foundation, Denelle Dixon revealed that the SDF was rather impressed by the commitment that the country had towards the adoption of innovation and digitalization.

Japan geared up to launch native CBDC as it takes cues from steps taken by China

by

The concept of cryptocurrencies started as a nascent idea but has now spread into a global phenomenon. It is not just the mainstream cryptocurrencies like Bitcoin and Ethereuym that are doing the rounds but rather centralized cryptocurrencies launched by state governments.

China was the first country to take centrally backed cryptocurrencies seriously, especially with the creation of the digital renminbi. Looking at the steps taken by the red dragon, other countries such as Japan were coming to the forefront to voice their contributions using Central Bank Digital Currencies [CBDCs].  

CDBCs are generally used for cashless payments through a smart device such as a mobile phone or tablet. The main intention of a digital currency is to eliminate the overheads and wastage related to physical fiat currency. Former Bank of Japan officials stated that China’s efforts in the ecosystem inspired other regions to follow suit.

The People’s Bank of China has been the pioneer in terms of building a digital trading ecosystem with officials also responsible for releasing coherent updates. Hiromi Yamaoka, an ex-official at the Bank of Japan commented:

“China has prompted moves toward digital currency (around the world). t (has done so at) surprising speed, as central banks tend to take a cautious stance. The design of a CBDC is very tricky and delicate. In advanced countries, a CBDC could conflict with existing payment and banking systems.”

Banking officials in Japan were confident that introducing native digital currencies in a major way would only uplift the financial situation of the country. The proposed method is to give the Japanese population a trading limit access of 50,000 yen per person. This would result in a total trading volume of 5 trillion yen, a figure that would account for just 5 percent of the total Japanese capital circulation.

Digital Currency Forum, a popular advocate of digital currencies in Japan revealed that there were plans to create “some form” of digital currency by 2023. Banking officials were of the opinion that if Japan does not launch a CBDC soon, it may lag behind other major countries in the race towards a streamlined digital economy.

This E-Commerce Platform Becomes The First To Accept China’s Digital Yuan

by

China’s tryst with its own central bank digital currency or the Digital Yuan needs no introduction. In the latest development, the e-commerce company Jingdong, popularly known as JD.com, has become China’s first virtual platform to accept the country’s very own virtual currency called Digital Yuan as a payment mode.

According to the official reports, JD Digits, which happens to be JD.com’s fintech branch, will be accepting digital yuan as payment for some products on its online mall. This will be a part of an experimental giveaway of digital yuan to citizens of Suzhou, a city west of Shanghai.

This news comes as China continues to aggressively gain a greater foothold on consumers spending patterns while simultaneously holding ground of its Yuan as the US dollar experiences weakness. Optimistic sentiment toward the Yuan increased as the Dollar index against a basket of 6 other currencies dropped significantly in the last week of November.

Prior to Suzhou’s move, Shenzhen had launched the country’s first large-scale public trial of the beta version back in October. This experimental giveaway of digital yuan will see 10,000 shops will take part in the trial, including the Chinese e-commerce giant, JD.com.

In addition to that, the city will also be delivering virtual red packets of money to the residents and a total of 100,000 digital red packets, each containing 200 Yuan. These will be distributed to residents by the 11th of December, which will be valid until the 27th of December. As reported by the South China Morning Post, any Chinese citizen living in the eastern city is eligible to register for the lottery through the city’s official public services app, called Suzhoudao.

It all started when China began the launch of its CBDC earlier this year. Following this, several pilot schemes have been taken forward in four Chinese cities. Apart from the big four state-owned banks –namely, the Bank of China, China Construction Bank, Industrial, Commercial Bank of China, and Agricultural Bank of China – that have launched internal testing of the sovereign digital currency, two more state-owned banks, the Bank of Communication and Postal Savings Bank of China, will join the trial in the city soon.

As expected, if the program is scaled up nationwide, China would become the most powerful economy to have a national digital currency.

Canada’s CBDC Preps Going About In Full Swing Reveals Deputy Governor Of Canadian Central Bank

by

Central Bank Digital Currencies [CBDC] is currently the topic of interest of several governments across the globe. Canada seems to be alarmed by the swift movement of other nations as the country was seen prepping for the launch of its very own CBDC. The deputy governor of the Canadian central bank, Timothy Lane appeared in an interview giving the world insights about the development of the country’s CBDC.

Canada To Roll Out CBDC Sooner Than Expected

The emergence of COVID-19 limited the use of cash and fueled the need for digital payments. This gave the authorities a reality check and initiated the fast flow in the development of CBDC. While China revealed that it was way ahead in the CBDC race, several countries were seen trying to catch up, whereas a few others continued slacking.

Timothy Lane, the deputy governor of the Bank of Canada who is also the head of research at the central bank’s crypto and fintech department revealed that the bank’s perception towards CBDCs has changed over the course of nine months. While the pandemic was one of the reasons, the other was the emergence of other virtual currencies. The central bank feared that these had the potentials of undermining or disrupting the monetary sovereignty of Canada.

While the country is working without setting a deadline, Lane revealed that the world might see a Canadian CBDC “sooner than expected.” Furthermore, China’s headway towards the development of CBDC has left many alarmed. Addressing the same, Lane said,

“The Chinese economy is big enough that even something that is only usable in China, it’s going to already have a very large market. At the same time, there are countries that China has closer economic ties with where there could be more use of a renminbi-based digital currency. I don’t really know if that’s part of their intent or not, to promote a greater use of the renminbi in electronic payments in other parts of the world.”

Additionally, several in the world believe that CBDCs embodied a solution that was in quest of a problem. Lane, however, believed otherwise. While suggesting that CBDCs would not have seen the light of the day if it did not address a real issue, Lane pointed out that it is a mere response to the change in finance and technology. Modernizing is very important. If people failed to do so and continued to dwell in the existing means, there would be a huge gap in the system, he added.

Saudi Arabia and UAE Join Hands to Conduct CBDC Experiment; Participants Include Six Major Banks

by

Cryptocurrency developments across the world have captured the attention of several major institutions, with some governments taking the extra steps to adopt virtual currencies. This rapid growth was personified recently when Saudi Arabia and the United Arab Emirates announced a joint central banked digital currency [CBDC] experiment between the two countries.

On Monday, the two countries revealed details about Project Aber which was kick-started in 2018. During the transfer, both parties used a single CBDC issued by the central banks instead of separate currencies that need to be converted.

One of the major reasons why the single CBDC transfer worked is that both the UAE Dirham and the Saudi Riyal are pegged to the United States dollar, creating a common backing. The main idea behind the experiment was to show the rest of the world that the decentralized economy was fast approaching. The experiment used synthetic transactions instead of real money, a transition that is set to be in the pipeline.

According to reports, the difference in monetary policies also features as part of the discussion between Saudi and the UAE. Sources added that future projects include an instant settlement for capital market transactions, use of multiple currencies as well as delivery versus payment. A major advantage of the currency single CBDC setup was that it removed the need for Nostro accounts to be maintained by a separate commercial bank.

The two central banks were not the only participants of the experiment as they were joined by six other commercial institutions. The banks of Riyad, Al Rajhi, and Al Inma in Saudi and Dubai Islamic, First Abu Dhabi, and ENBD in the UAE were the banks that also tested their virtual assets mettle. The aforementioned banks were also brought in to discuss future plans of issuing a CBDC for a specific transfer and then redeeming it at the end.

Security was also discussed during the experiment as it was one of the most important characteristics to bring customers in. All the participants unanimously agreed that transactions need to be resilient no matter what the situation with the transmitter and receiver. If all goes well and good, experiments in the future would include more participants and a much larger transaction ecosystem.

ECB Most Likely To Take 2-4 Years To Develop Digital Euro

by

Central banks have been speeding towards the launch of a digital currency. The ECB has also been steering towards the same. With China and several other countries ahead of the CBDC game, the pressure on certain countries has surged. ECB, however, isn’t trying to get on top of the game.

ECB To Explore Prospects Of Digital Currency

In the recent European Central Bank [ECB] Forum on Central Banking 2020, the President of the ECB, Christine Lagarde addressed the development of central bank digital currencies [CBDC]. While she assured that the platform is keen on developing a digital currency, she pointed out that the bank is not “racing to be first.” Lagarde had a “hunch” that the European digital currency would make its way into the financial market.

While the COVID-19 pandemic put the world in shackles further unveiling the need for digitalization, several countries commenced probing and developing digital currencies post the pandemic. However, the concept of incorporating a digital currency into the existing system came to light following the need for elevated monetary sovereignty. She added,

“It’s not a nicety, it’s not a tantrum, it is something that if it’s cheaper, faster, more secure for the users then we should explore it. If it’s going to contribute to a better monetary sovereignty, a better autonomy for the euro area, I think we should explore it. If it is going to facilitate cross border payments, which are very laborious in quite a few corners of our big world, then we should explore it.”

Just last month, the ECB revealed that it would be “intensifying” its endeavors in the development of the European digital currency. While the EU recently denounced the efforts of other private sectors to launch a stablecoin, it asserted that the issuance of a stablecoin should be limited to the ECB only.

Elaborating on the development and issuance of the digital euro, the President revealed that the currency would not be available right away. She suggested that the CBDC could take about two to four years to enter the global financial scene.

Relevant Stablecoin Initiatives To Soon Be Part Of The UK Treasury

by

A few years ago, digital assets were subjected to tremendous government hate and hostility. The non-volatile nature of stablecoins, however, seemed to have attracted regulators. Since digitization began in full swing, governments have been exploring the development of the digital currency of the central bank, most commonly known as the CBDC. Though China has been the fastest in the development of the CBDC, other countries have been caught up in the race. The UK seems to be the latest one to take a big step in that direction.

UK To Probe Stablecoins And CBDC

The United Kingdom’s Treasury Department seems to be serious about digitalization as it yearns to put into place regulations for the same. A recent article from the UK Treasury revealed that country was steering towards revamping the existing financial sector of the country. The Chancellor of the UK Treasury, Rishi Sunak explained that the Treasury would put forth necessary initiatives pertaining to stablecoins in order to make sure it is at par with the already established payment methods.

UK’s departure from the EU created quite a buzz and the Treasury views it as an opportunity to formulate a new chapter in the history of financial services in the country. Sunak added,

“By taking as many equivalence decisions as we can in the absence of clarity from the EU, we’re doing what’s right for the UK and providing firms with certainty and stability. Our plans will ensure the UK moves forward as an open, attractive and well-regulated market, and continues to lead the world in pioneering new technologies and shifting finance towards a net zero future.”

Sunak, also took to Twitter to reveal that the country would soon publish a consultation in aid of new and privately-issued currencies. While the UK’s latest move reveals that the country has been welcoming newly issued stablecoins, the European Union had revealed contrasting thoughts about the same. The EU in a recent meeting revealed that no other private organization apart from the ECB was to issue stablecoins.

Furthermore, with regard to CBDC, the Chancellor revealed that the Bank of England and the Treasury were contemplating allowing central banks to issue their native digital assets as a counterpart to cash.

Reserve Bank of Australia Aims To Complete Central Bank Digital Currency Project By End Of 2020

by

The world is slowly but steadily moving closer to the numerous Central Bank Digital Currency [CBDC] roll-outs.

The Reserve Bank of Australia [RBA] has announced that it is partnering with the Commonwealth Bank, National Australia Bank, Perpetual and ConsenSys Software, a blockchain technology company, on a project to explore the potential use and implications of the wholesale form of the Central Bank Digital Currency [CBDC] using distributed ledger technology [DLT].

According to the official announcement, this collaborative project is essentially part of the ongoing research on “wholesale” CBDC at the Australian financial institution. The RBA also noted that the project will involve the development of a Proof-of-Concept [PoC] for the issuance of a tokenized form of CBDC which can be used by the wholesale market participants for the purpose of funding, settlement, and repayment of a tokenized syndicated loan to the Ethereum-based DLT platform.

The PoC will be leveraged to explore the implications of ‘atomic’ delivery-versus-payment settlement on a DLT platform as well as other potential programmability and automation features of tokenized CBDC and financial assets, the official release noted.

Following the latest development, RBA’s Assistant Governor [Financial System] Michele Bullock asserted,

“With this project we are aiming to explore the implications of a CBDC for efficiency, risk management and innovation in wholesale financial market transactions. While the case for the use of a CBDC in these markets remains an open question, we are pleased to be collaborating with industry partners to explore if there is a future role for a wholesale CBDC in the Australian payments system”

Notably, RBA further revealed that the CBDC project is expected to be completed around the end of this year, and the parties aim to publish a report on it and its main findings during the first half of 2021.

Central Bank Digital Currency [CBDC] in Australia

Different forms of Money

This news comes around two weeks later the Reserve Bank of Australia revealed research on a potential wholesale CBDC right after its comments stating that there was no need for one. The RBA was highly skeptical and was not convinced of a strong policy case for issuing a CBDC around mid-September.

Tony Richards, Head of Payments Policy at the RBA, had previously asserted,

“We will be continuing to consider the case for a CBDC, including how it might be designed, the potential benefits and policy implications, and the conditions in which significant demand for a CBDC might emerge.”

CBDC Worldwide

Australia’s latest dive to CBDC comes at a time when central banks all across the globe were looking at CBDCs and to explore the need to create and issue a tokenized version of their respective national currencies. China is perhaps the furthest along, while other nations were still in the early stages of determining whether a CBDC is even desirable.

More recently, the Bahamas, which happens to be an island nation in the West Indies, officially launched a new central bank digital currency, the so-called Sand Dollar on the 20th of October. With this, the country of 393,000 people became the first to make CBDC available to all residents.

Chinese Tech Giant Huawei Rolls Out Smartphone That Aids The Digital Yuan

by

Unfettered by the abject pandemic, China continues to outsize other countries with regard to the development of the Central Bank digital currency  [CBDC]. As many governments are only getting started on CBDC research and development, China is way ahead in the game.  A recent update from the country revealed the digital yuan’s latest association.

Digital Yuan Finds Shelter At Huawei

Telecommunications equipment company, Huawei is one of China’s biggest assets, the platform revealed its support for the country’s CBDC by rolling out a smartphone that aids the digital yuan. In a recent press conference, the tech giant announced that the Huawei Mate 40 was equipped with a built-in hardware wallet for the digital yuan.

The CEO of the platform for the consumer business wing, Yu Chengdong affirmed that the Huawei Mate 40 was the first of its kind as no other smartphones had enabled support for China’s yet to be launched CBDC.

Furthermore, the Chinese tech giant affirmed and elaborated on the same in a Weibo post. Huawei’s post read,

“The Mate 40 series is the first smartphone that will support digital yuan hardware wallets, featuring hardware-level security, controllable anonymous protection and dual offline transactions – for a novel, safe and convenient payment experience.”

While countries have just begun carrying out research on central bank digital currencies, China seems to be past the testing stage. The Mate40 smartphone was reportedly rolled out to enhance the effectiveness of the Chinese digital yuan on mobile phones. Despite the fact, that this is a huge advancement for the country as well as the tech giant, the smartphone’s ability to convert fiat into a physical-digital yuan wallet is still uncertain.

Huawei’s association with the digital yuan goes way back as the platform was one among the twenty other companies that had aided the development of China’s CBDC. Several other tech platforms had also collaborated with the Chinese government for the development of the CBDC, however, Huawei seems to be the first to roll out a smartphone as such. The Huawei Mate 40 smartphones were undoubtedly a hit as they sold out in 28 seconds in the Asian country.