CBDC, where are we

Mexico could be the next country to launch its own Central Bank Digital Currency (CBDC). This 2022 could ultimately be the year of the consecration of central bank digital currencies. Summary • CBDC, where are we • China at an advanced stage • The e-Naira • Europe and the United States overdue • The latest arrival: Mexico • Why the CBDC rush CBDC, where are we The Atlantic Council provides guidance on how many countries have launched or are about to launch their own state digital currency. Well, there are currently 9 countries that have an active CBDC and they are: • Bahamas; • Caribbean (with 7 states); • Nigeria.

Instead, there are 14 countries that are experimenting with pilot projects. Among these are Sweden with its e-Krona, Ukraine which will instead build its currency thanks to Stellar, but also the United Arab Emirates, South Korea, and above all, China, the most important of all for its vastness. Europe, Russia and Canada are included among the countries that have the project under development, together with Australia, Brazil and Venezuela (where we talk about Digital Bolivar, not to be confused with Petro). The United States figures further back, still in the research phase. It is singular that there are also seven countries where CBDC projects are inactive, and 2 where they have been canceled. These are Ecuador and Senegal. A graph shows that in December 2021, 43% of countries that speculated on a digital state currency are in the research phase, while only 10% have already launched a state currency. 9 countries have launched CBDCs

China at an advanced stage

Leading the ranking of countries that are planning a state digital currency and are at an advanced stage is obviously China, if only because it is the largest country in the world with a population of over 1 billion. The design of the digital yuan is now in the pipeline. Just recently, Beijing has also launched the wallet app for the Digital Yuan, which is currently only operational for 11 cities. Connected with 9 banks, it also allows offline transactions. China's goal is to make sure that everything is ready for the Beijing Olympics, which kick off on February 4th. It is very close to being able to see the digital yuan in all its power, both inside and outside China. The e-Naira In October 2021, Nigeria launched its eNaira, minting 500 million pieces equal to $ 1.21 million. At the moment, only current account holders can use this electronic money, but soon its use will be extended to another 60 million Nigerians who are unbanked but recognizable through the Nigerian identification system NIN. Currently, payments can be made at $ 484 per day.

Europe and the United States late

The European Union is developing the digital euro, but the launch could still take several years. The European Central Bank has made several technical experiments, but an official decision has not yet been made. The United States, on the other hand, is still in the study phase. It is safe to bet that they will be able to accelerate their plans on the digital dollar in order not to lag behind China. The latest arrival: Mexico The latest to join the list of countries that will launch a state digital currency is Mexico. On Twitter, the official Mexican government profile announced that CBDC will be a reality in 2024: "The Bank of Mexico reports that by 2024 it will have its own digital currency in circulation, considering these new technologies and state-of-the-art payment infrastructure of utmost importance as valuable options for advancing financial inclusion in the country." A few words that indicate that the state digital currency will be made, and in two years it will see the light. Why the CBDC rush With the spread of cryptocurrencies, national authorities have acknowledged that today's world of payments can go faster than it is used to with banks. And that a mobile phone connected to the internet is enough to transfer money.

Each state is probably motivated by two needs: • allow quick transactions; • do not leave the field open to cryptocurrencies, be they decentralized, centralized, volatile or stable. In reality, cryptocurrencies, stablecoins and CBDCs are different tools, destined more to coexist than to rival. Surely everyone will benefit from the launch of the CBDCs, because no matter how the money circulates, the important thing is that it circulates, because if money moves, the economy moves.

Eleonora Spagnolo

Journalist with a passion for the web and the digital world. She graduated with honors in Multimedia Publishing from the La Sapienza University of Rome and attended a master's degree in Web and Social Media Marketing.

COMMENT

While we can find technical explanations on the block-chain, which we have reported on this site, the CBDCs have been announced but it is not clear on which cryptographic criterion they are based. We therefore confirm that our Real Digital Currency, based on an original cryptography without block-chain, has all the credentials to become CDBC of various countries. we confirm that the algorithm can be customized and that therefore each country would have its own CBDC with one of our algorithms.